>> We did a rush job today.>> Three weeks after President Trump put his signature on a new US Tax Law, an unexpected loophole uncovered by a Harvard analyst, could let giant corporations avoid billions in taxes. Reuters correspondent David Morgan explains.>> Republicans were determined to get the tax bill into law before the end of last year.
So they rammed it through Congress now. We're starting to learn about glitches that appear to be unintended but which could be taken advantage of. A Harvard lecturer, his name is Stephen Shay, he's an expert on tax policy. He has found a loophole with the formula, which the law requires corporations to use when they determine how much of their overseas holdings should be taxed at 15.5% for cash investments versus 8% for a liquid investments, which people would think of as property, for example.
So if corporations can reduce their cash position, they can funnel more of their overseas holdings into the lower tax rate. If Apple, for instance, were to pursue that kind of strategy, they could reduce their tax bill on overseas profits by more than $4 billion.>> Shay also discovered that an anti-abuse measure in the new law intended to prevent companies from taking advantage of unintended loopholes may not actually have any bite.
According to Shay, that's because the measure wasn't written properly, saying quote this is clearly the result of rush to legislation.>> Biggest reform of all time