As Republicans and Democrats squabble in Congress over how to balance a U.S. budget increasingly fond of red ink, they should take time to consider a proposal from two of America’s most outspoken business leaders: John Chambers of Cisco Systems and Safra Catz of Oracle Corporation.

In a recent Wall Street Journal article, Chambers and Catz refer to the “trillion-dollar elephant in the room”–their term for the vast sums of money left unused on the balance sheets of many of America’s biggest corporations.

Why is this money left unused, they ask? Because most of this money was earned by U.S. companies in overseas operations and bringing the money back home would expose their earnings to the unnecessarily high U.S. corporate tax rate of 35 percent: a rate higher than all developed economies but Japan.

This is because of a quirk in the United States tax system that allows the IRS to levy a Repatriation Tax on foreign earnings, meaning that the income earned by U.S. corporations abroad can be taxed at the U.S. corporate tax rate of 35 percent when brought stateside.

U.S. corporations do get credit for any taxes paid to foreign governments, but end up paying significantly more in taxes when they bring foreign earnings home than they would if they were based in any other country.

The United States is the only developed nation to pursue such a tax policy. Most developed countries levy no tax at all on foreign earnings; some tax them at no more than a two-percent rate.

Chambers and Catz argue that by removing the Repatriation Tax, Congress would be able to provide another jolt to a U.S. economy still recovering from the throes of the financial crisis by stimulating private investment. I am inclined to agree.

Because of the tax, and the United States’s unusually high corporate tax rate, U.S. corporations are in no rush to bring money earned abroad back home. Instead, they are choosing to keep their money overseas, investing it in foreign assets (even at lower rates of return) to indefinitely defer their day of reckoning with the IRS.

This is not helping the economic recovery as those profits are not being fed back into the economy. Money that could be used to hire new workers, train existing workers or develop new products is instead sitting dormant or is underutilized in foreign assets.

By removing, or at least lowering, the Repatriation Tax, the United States would see a resurgence in private investment as companies would find it less painful to bring profits home.

This is exactly what Chambers and Catz contend. They argue that the U.S. should re-institute a policy passed in 2004 that allowed for a temporary tax holiday for businesses. In 2004, instead of 35 percent, corporations were only charged an additional five percent on top of taxes levied abroad.

Because of the measure, over 362 billion dollars was repatriated to the U.S. that year: a massive increase over the year before. By including provisions that bar companies from spending this money on executive compensation and encourage them to instead spend it on hiring and research and development, the U.S. could give a very real boost to an economy well on its way to recovery.

In addition, the IRS would be able to recoup over 50 billion dollars in tax revenue from the lowered repatriation tax (five percent of a trillion dollars), money that the country would not receive otherwise.

Seeking any way to avoid paying the punitively high U.S. corporate tax rate when they bring earnings home from abroad, companies have devised many clever ways of tricking the IRS.

Many of these techniques would not be out of place in a John LeCarre spy novel. One such technique, dubbed the “Killer B”, is named for section 368(a)(1)(B) of the Internal Revenue Code, which concerns tax-free reorganizations.

A company using the technique sells its shares to an offshore company under its control and is then able to bring the cash from the sale home tax-free. The foreign earnings, disguised as payments for stock, are tax-free because sales of stock are not considered income under U.S. tax law.

With the Repatriation Tax lowered, companies would have no need to resort to such sly maneuverings and would be much more willing to bring the trillion dollars locked up abroad back home.

It may be counterintuitive, but by lowering the Repatriation Tax, the U.S. could not only spark economic activity, but also increase tax revenue. President Obama needs to follow through on his commitment to listen to the recommendations of business leaders and lend an ear to Chambers and Catz.