35% of Nothing

Wondering why Microsoft recently acquired Skype for $8.5 Billion instead of investing in US operations? Look no further than the perverse US corporate income tax. MSFT holds over $40 billion in cash and short-term investments outside the US. If it were to invest that money back in the US, it would have to hand the government a 35% cut off the top. Apparently the US government would rather collect 35% of nothing than, say, 20% of something. But it feels really good to tell people you're beating up on those Evil Corporations. You know, the ones that respond to the beating by creating jobs in other countries.