Bit strange to mention Microsoft 17 times when you'll find offices in Dublin for Google, IBM, Apple... anyone who's anyone. This is far from specific to Microsoft yet the article is for the most part very targeted. Google from memory boosted their earnings last year by something like 20% by tax avoidance (or whatever the correct term for completely legal tax-dodging is).

>Without the tax holiday, the companies would have to pay a hefty tax to use the money in the U.S. to invest in hiring or to pay shareholder dividends and stock buybacks.

At the end of the day, the big problem here is that it's beneficial for these companies to leave their money outside the US. That money doesn't get spent inside the US and therefor ultimately doesn't help our economy.

Sadly, congress will probably enact some draconian measure that will cause even more harm then good to "solve" this problem. To them the problem is lost tax revenue, when the real problem is lost domestic prosperity.

Change the law to tax their oversea's profit like states tax income. For example, let's say MA is 5%, CT is 6% and you earn salary in MA, but live in CT then you essentially pay MA 5% and CT 1%.

That actually is how we tax international income. The issue is that nation-level taxes are in the double-digit ranges (i.e., 35% or above), so crediting foreign income taxes against US income taxes still results in a 35% (base) rate.

Indeed, ignored in all this discussion (ignorantly by the media, deliberately by the companies), is that intercorporate dividends from EU countries to/from NAFTA countries are tax-free (or mostly tax-free), in the sense that they are taxed only once at the corporate level, as income to the payor. If the recipient distributes the dividends onwards to its own shareholders, it is taxed as income to those shareholders at lowered rates.

These companies aren't planning to use their worldwide earnings to hire. If they were, the tax rates wouldn't matter because they get dollar-for-dollar deductions for such expenses (except for executive compensation), and intercorporate dividends they received or which they pass on to corporate shareholders are tax-free (or mostly tax-free) because of the dividends received deduction.