Income inequality has company—make that companies. A new wealthgap is opening among U.S. corporations, where cash holdings aregrowing more concentrated as the rich get richer.

Eighteen American businesses held 36 percent of corporate wealthin 2013, up from 27 percent in 2009, according to a report fromStandard & Poor's. The bottom 80 percent have lost ground, withjust 11 percent.

The top 1 percent is a Who's Who of multinationals, includingMicrosoft Corp., Google Inc., Coca-Cola Co., Apple Inc., and FordMotor Co., that reap a big share of profits from non-U.S. sales.Because tax law discourages moving that money back to the U.S.,cash is piling up abroad and companies are taking novel steps toadapt, including borrowing against those assets to financeoperations at home.

“Unlike individuals, corporations don't want to be in thattop 1 percent,” said analyst Andrew Chang, lead author of theS&P report. “This rising cash balance among the richest istax-policy driven.”

American multinationals are taxed by the country where profitsare earned and by the U.S. when—or if—the money is brought back.The corporate tax rate in the U.S., running up to 35 percent, isthe highest in the industrialized world.

Companies have long lobbied Congress to rewrite the code as cashfor the wealthiest 1 percent rose to 23.6 percent as a share oftotal assets last year from 20.4 percent in 2009, Chang found. Foreveryone else, it accounted for less than 7 percent.

“Overseas cash continues to accumulate without being touched,”Chang said. “It's undoubtedly going to increase.”

That's bad for investors, who like to see money put to use orreturned to shareholders. It's also not good for the deficit-riddenTreasury, which missed out on an estimated $83.4 billion in taxrevenue this fiscal year as companies delayed bringing backearnings, according to the congressional Joint Committee onTaxation.

And it can't buy happiness for one-percenters such as MedtronicInc. that are taking drastic steps to make use of their earningsoverseas. The medical-device manufacturer is taking some $13billion it has offshore to buy a London-based competitor in aninversion, a merger which enables it to move headquarters abroadand pay lower taxes.

“Obviously we'd rather have our cash work for us because it'ssitting in accounts with low interest rates and there'd be betterways to invest that money,” said Fernando Vivanco, a spokesman forMedtronic. “Are there any companies that you know that could say welove having our cash trapped?”

Domestic Assets

While Chang estimated 83 percent of cash held by the wealthiest1 percent comes from foreign earnings, domestic assets areshrinking to the point that there's not always enough to financeU.S. operations, he said.

That's one reason Apple, Cisco Systems Inc., and otherone-percenters are borrowing. Cupertino, California-based Apple,which has 78 percent of its $40.7 billion overseas, caused a stirlast year when it said it would take on $17 billion in debt to makedividend payments. The company went back to the bond market in April.

It's cheaper to borrow against foreign cash than repatriate it,Cisco spokesman John Earnhardt said. Ninety-three percent of theSan Jose, California-based Cisco's $47.1 billion is held outsidethe U.S.

“If a territorial tax were instituted or an acceptable level ofcorporate tax was instituted, we'd bring that money back,”Earnhardt said. “Would it be better utilized here, where ourcorporate headquarters is? Yes.”

While that borrowing has kept money circulating in the U.S.economy, it's a holding pattern that can't be sustained if interestrates rise and prospects for tax legislation dim. That's why moreand more executives are weighing mergers with foreign companies inorder to lower taxes, said Douglas Holtz-Eakin, an unpaid adviserto the Alliance for Competitive Taxation, a Washington businessgroup lobbying for tax reform.

“They've given up, they think there's no hope,” saidHoltz-Eakin, an economic adviser to former President George W.Bush. “And when the headquarters go, they're likely to put R&Dnext to the headquarters.”

When Minneapolis-based Medtronic completes its merger withCovidien Plc, it will get an Irish address and put future earningsout of reach of U.S. tax collectors.

In May, London-based AstraZeneca Plc rebuffed a similar overturefrom Pfizer Inc. Drugstore chain Walgreen Co. last week abandonedplans to change its address from Illinois to Switzerland when itcompletes a takeover of Alliance Boots GmbH.

Lew's Warning

The Obama administration is trying to shut down such inversions after Treasury Secretary Jacob J. Lewwarned of a hollowing out of the corporate tax base.

“We should prevent companies from effectively renouncing theircitizenship to get out of paying taxes,” Lew wrote in a July 15letter to lawmakers. “What we need as a nation is a new sense ofeconomic patriotism.”

Because multinationals reap much of their earnings outside theU.S., where markets are less developed and business is growingfaster, it makes sense to keep at least some of that moneyabroad.

One-percenters Intel Corp., General Electric Co., andHewlett-Packard Co. keep cash abroad because that's where businessis growing.

“There's a real need for us to maintain cash offshore,” Intelspokesman Chuck Mulloy said. “The cash is there because we need itthere.”

U.S. multinationals have accumulated $1.95 trillion in foreignearnings, up 11.8 percent from a year earlier, according to aBloomberg study. In addition to prompting inversions, the money hassent companies on an overseas buying spree.

GE, which operates in more than 170 countries, is using $57billion in un-repatriated profits to buy France's Alstom SA. Thedeal will bring overseas acquisitions by U.S. companies to morethan $75 billion in 2014, slightly ahead of last year's pace, datacompiled by Bloomberg show.

While the tax code gets blamed for dragging down the economy,freeing up foreign cash wouldn't necessarily stimulate growth. Whenmore than 843 companies including Pfizer, Oracle and Merck,repatriated $312 billion during a 2004 tax holiday, the hoped-forjob creation never materialized. Instead, stock buybacks andexecutive pay rose, giving a lift to individual one-percenters.

“If they ended up paying out this money to stockholders, thelion's share is going to go to the top 1 percent of individuals,”said Thomas Hungerford, a senior economist at the Economic PolicyInstitute who wants to ban inversions. “But if you get the moneyback here and at least get it circulating, that will help theeconomy to some extent. It will certainly help our long-termfederal budget problems.”

And the corporate 99 percent might reap the benefits.

“You could argue that companies that make a billion dollars anddon't pay taxes are freeloaders,” said Mitch Rofsky, president ofthe Better World Club, an insurer based in Portland, Oregon, andmember of the American Sustainable Business Council, a group ofsmall employers.

“It's basically an issue of 'Do our economic models work, isinfrastructure supported, does government have the money itneeds?'” Rofsky said. “It's unfair.”

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