By Daniel Eran Dilger

Published: 04:00 PM EST (01:00 PM PST)

Apple has joined a consortium of companies including Cisco, Duke Energy, Oracle, and Pfizer to lobby the US government for a tax holiday that would allow corporations to bring home an estimated $1 trillion now parked in overseas accounts.

Without the tax holiday, the companies say they won't spend their overseas earnings in the US, given that they face a 35% tax on their profits generated outside the country. Their plan asks for a temporary break that would enable them repatriate their foreign cash by paying only 5% in taxes, during a one year period.

In return, the companies say they could then justify investing in research, hiring and other domestic spending that would boost the economy, according to a report by Fortune.

What to do with Apple's $60,000,000,000?

Apple currently has cash holdings of $59.7 billion, but it earns more than 60 percent of its revenues outside the US.

In the company's Q1 2011 earnings conference call last month, Apple's chief financial officer Peter Oppenheimer stated that Apple's "tax rate for the quarter was 24.6%, below our guidance of 25.5% due to the one-time benefit of the retroactive extension of the R&D tax credit from January 1, 2010. We expect our tax rate for the remaining quarters of fiscal '11 to be about 25.5%."

Apple hasn't given any indication of what exactly it might do with its vast cash reserves were the US to allow it to bring more of that money into the country with a tax break incentive. Some investors and analysts have pleaded with the company to distribute its holdings to shareholders in the form of dividends.

Apple's chief executive Steve Jobs has noted at previous shareholder meetings that such a move would be a shortsighted use of the company's buying power, and would remove a central pillar holding up the company's valuation. By holding onto the cash, Apple can be prepared to jump on new opportunities as they arise.

This all happened before

The report noted that in a previous tax holiday, granted in 2004, companies had similarly argued that repatriating foreign funds at discounted tax rates would enable them to boost the economy through direct domestic investment.

However, even though the Treasury Department attempted to write rules at the time to ensure the money would be invested locally, most of the cash (60 to 92 percent, according to one study cited in the report) was simply returned to shareholders in the form of stock buybacks and dividends.

"A tax holiday would bring a substantial amount of cash back to the United States and paying that out to shareholders is good for the economy," said the study's co-author Kristin Forbes, who Forbes noted is an economics professor at MIT's Sloan School of Management and was a member of President George W. Bush's council of economic advisers. "But if you're a politician claiming this will create a lot of jobs or new investment, it isn't supported by the data."

Private stimulus package getting hard to ignore

An attempt to replay the 2004 tax break in 2009, as part of President Obama's American Recovery and Reinvestment Act stimulus plan, was supported by a bipartisan group of senators led by California Democrat Barbara Boxer and Nevada Republican John Ensign, but it failed to get more than 42 votes.

At the time, opposition to the plan came from senators who were upset by how, as Boxer acknowledged in the report, companies had previously "abused the spirit of the requirements on how the money needed to be spent" under the previous tax holiday.

The "privately financed stimulus" plan is being looked at skeptically by both rural Democrats and by Tea Party-affiliated Republicans who see the measure as a handout to big corporations, while the new influx of relatively moderate Republicans in the House are likely to be more amicable. President Obama has shown little enthusiasm for the corporate tax holiday in the past, but is meeting with tech industry CEOs on a trip to Silicon Valley tomorrow in what the report referred to as "scouting for opportunities to burnish his relationship with big business."

At the same time, the Treasury is stepping up efforts to find individuals with hidden reserves in offshore accounts, offering amnesty programs that require paying a 5 to 25% penalty on top of regular back taxes and interest on any money that is reported to the government, with the threat that money that isn't voluntarily disclosed will be hit with even steeper penalties and the potential for criminal prosecution.