U.S. Firms Keep Billions Overseas

[dArKeR]

With sales up 5 percent last year, Merck & Co. was not satisfied: To hold down costs, the pharmaceutical giant shed 3,200 jobs as 2003 drew to a close, and announced that an additional 1,200 positions would go this year.

But Merck's picture abroad was quite different. It made 1,300 new hires in 2003 outside the United States, on top of the 900 brought on the year before. Company documents indicate that Merck had a cumulative $18 billion in foreign earnings untaxed by the end of last year, $3 billion more than in 2002. And the company said it had no intention of ever paying U.S. taxes on that burgeoning sum.

"Foreign earnings of $18.0 billion . . . have been retained indefinitely by subsidiary companies for reinvestment," Merck's annual filing with the Securities and Exchange Commission (news - web sites) said. "No provision is made for income taxes that would be payable upon distribution of such earning."

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