There's a lot of cash on the sidelines, but those sidelines aren't in the U.S. They're overseas—in tax shelters.

According to a new report from ISI Research, U.S. S&P 500 companies now have $1.9 trillion parked outside the country. Now, some of that is just multinational corporations profits overseas—yada, yada, yada, globalization. But a big part of it is tax avoidance. Tech and healthcare companies in particular have created byzantine systems of subsidiaries to channel earnings from high-tax to low-tax jurisdictions. Apple, as you might recall, figured out how to legally avoid paying any corporate income tax anywhere on its $30 billion of overseas profits. It set up Schrödinger's shell company: an Irish subsidiary that didn't owe Irish taxes because it was managed and controlled from the U.S., but didn't owe U.S. taxes because it was incorporated abroad.

You can see how steadily these corporate cash hoards have increased in the chart below. As Dan McCrum points out, it follows a basic power rule: Just 45 companies account for 70 percent of this money.

Now, tax lawyers can dream up all the overseas shell companies they want, but that doesn't matter if multinationals want to bring that money back to America. The U.S. government taxes the difference between what companies pay in corporate income tax abroad and what they would have paid here, so there shouldn't be any benefit to all this avoidance when they do. Unless, of course, they think there's going to be another tax repatriation holiday.