Can you give specific examples where corporations were allowed to legally transfer profits they earned in the US to off-shore banks to keep from paying taxes?
My understanding is, if the money is earned in the US, it's subject to taxation. There's no way to put that money in offshore banks and avoid taxes -- legally, that is.
If the money is earned overseas, THEN they can stockpile that cash in banks. The high US corporate tax rate is what's been preventing these companies from investing that money in the US, because as soon as they bring it into the US, they owe income tax on it. That's like voluntarily handing over 20% of their cash reserves to Uncle Sam. If you're talking about billions, that 20% is a huge hit to your liquid capital. It helps explain why many companies opened stores and operations overseas, so they can pay less tax, or no tax, on that money.
First of all, US Corporations are subject to US federal taxation regardless of where their profits originates. However, due to the current loopholes in the law, many corporations legally elect to not repatriate much of their wealth back to the US; hence, deferring their tax liabilities. The prevailing presumption underpinning the current GOP tax bill is the belief that by lowering US federal corporate taxation, many US corporations will elect to "bring back their profits back home", through which those funds can be reinvested back into the domestic economy, stimulating job growth and wage/salary increases, as well as fulfill their tax obligations to the federal government.
This is what is hoped and let us pray it happens.
However, keep in mind, a one time tax holiday was passed under the Bush Administration in 2004. The results did not result in the creation of jobs nor increasing the wages and salaries of American workers (
https://www.nytimes.com/2017/11/29/business/taxes-offshore-repatriation.html). Furthermore, according to Center of American Progress (
https://www.americanprogress.org/issues/economy/reports/2014/01/09/81681/offshore-corporate-profits-the-only-thing-trapped-is-tax-revenue/), much of the so called "overseas profits" are actually already being utilized domestically in America. Hence, decreasing the US Corporate tax rate will only let those corporations utilizing the deferrals of overseas tax liabilities further escape paying their fair share of taxes as well as very unlikely have its desired effect of spurring more economic activity, let alone increase workers wages or salaries.