Washington --

Silicon Valley technology firms that are lobbying Congress to slash taxes on money they bring home from abroad, arguing that doing so would help them create millions of jobs, already send more than half that money back to the United States without paying taxes, according to a Senate investigation released Wednesday.

A wrinkle in the corporate tax code permits Google, Cisco, Apple, Adobe Systems, Oracle and other U.S. multinational corporations surveyed to invest nearly $250 billion in the United States without paying the 35 percent corporate tax rate that applies to repatriated foreign earnings, according to the report by the Senate's Permanent Subcommittee on Investigations.

The corporations, which are not allowed to invest the money in their own companies, can escape the 35 percent tax if they invest in other domestic assets, such as stocks, bonds and bank deposits.

"They've been able to take advantage of the safety and security of the U.S. financial system to protect their money while deferring the payment of U.S. taxes on those funds, taxes which are needed to support our U.S. system," said Sen. Carl Levin, D-Mich., who chairs the subcommittee.

Under current law, money corporations earn abroad is free from U.S. taxes until it is returned to the United States. Silicon Valley's technology giants have banded together with pharmaceutical companies and other multinationals in the Win America Coalition in an attempt to get Congress to cut their tax rate from 35 percent to just over 5 percent on overseas earnings they bring home.

Tech company lobbyists, arguing that the money is "trapped" abroad by the 35 percent tax, have said the tax holiday is one of their top priorities in Washington. Data in the committee's report came from its survey of 27 U.S. multinational corporations; overall, the firms are estimated to have $1.4 trillion parked abroad, much of it in tax havens.

The survey data showed that Adobe, Apple, Broadcom, Cisco and Google have invested 76 to 100 percent of their foreign earnings in U.S. stocks, bonds, bank deposits and other domestic assets, a greater share than the other companies surveyed.

Oracle has invested more than half its foreign earnings in U.S. assets, the report said.

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Such large domestically invested sums mean that estimates of job growth from a so-called tax holiday would be far lower than the companies have claimed. That's because the money is already being put to work in the United States.

Huge cash reserves

Levin said the companies' public financial filings show that they have huge cash reserves if they wish to expand.

On Wednesday, the Win America group issued a statement acknowledging that its member corporations keep deposits of their foreign subsidiaries in U.S banks and bonds, but added that "does not mean that their American parent companies are able to deploy these funds in the U.S. economy."

The group said it would "be better for the U.S. economy if American companies could actually put this money to work in our domestic economy," and said Levin's "one-sided, partisan report does nothing but attempt to score rhetorical points while U.S. profits continue to be invested around the world instead of here at home due to a seriously flawed tax code."

Sen. Barbara Boxer, D-Calif., helped pass a tax holiday on repatriated foreign earnings in 2004. She is a co-sponsor of a similar proposal now by Sens. John McCain, R-Ariz., and Kay Hagan, D-N.C. Levin is a leading critic of the idea. Rep. Kevin Brady, R-Texas, is sponsoring the House version.

Bipartisan support

A tax holiday has significant bipartisan support from members of Congress desperate to find something they can agree on as a way to boost the economy.

The Win America Coalition has recruited top economists, including UC Berkeley Professor Laura Tyson, a former Clinton administration economist, and Douglas Holtz-Eakin, past director of the Congressional Budget Office and adviser to McCain during his 2008 presidential run, to show how a tax holiday would inject hundreds of billions of dollars into the economy and create jobs.

Independent tax analysts have widely panned the idea. Numerous academic studies of the Boxer tax holiday showed that the companies spent most of the money they brought back after 2004 on shareholder dividends, stock buybacks and executive pay, while some of the companies actually cut jobs.

Interest groups as disparate as the conservative Heritage Foundation and the liberal Citizens for Tax Justice strongly oppose another tax holiday, in part because of evidence that the last one encouraged multinationals to send more of their earnings overseas, in anticipation of another tax holiday.

Unfair advantage?

Domestic corporations that do not have overseas subsidiaries argue that it is unfair to give multinational companies a 5 percent tax rate.

An October report by the Senate subcommittee found heavy use of tax havens by Silicon Valley companies, with 94 percent of the $3.3 billion that Oracle repatriated after the 2004 tax holiday coming from a shell subsidiary in Ireland, while Intel brought most of its money back from a subsidiary in the Cayman Islands.

Tax experts said technology and pharmaceutical companies are especially well-positioned to use overseas tax strategies because they operate globally and rely on patents and other intellectual property that is more easily transferred among subsidiaries than hard assets, and harder for tax authorities to value.