They hire very expensive lawyers and accountants to pay less or simply bribe politicians (read speech money) to keep loopholes that will benefit them. As a result a lot of money is wasted to totally unproductive efforts while increasing corruption and lowering respect of the tax system.

That's because they are deferring the taxes on the ex-US money.

It's a 401k in the US. It's a tax deferment, not a tax break. If your effective rate went from 35% to 25% due to your 401k contribution, you still end up paying 35%, just not right now.

No, you don't end up paying 35%. Part of the advantages of a 401k come from distributing dollars being taxed at a high marginal rate to another year when they are taxed at a lower marginal rate.

It all depends. Sure, if you put almost nothing in a 401k, then when you pull it out, you'd be in a lower margin tax bracket (and living on very little money).

But if you put a lot in, the fact you HAVE to start taking money out at a certain again AND it all gets taxed before you die means you pretty much end up paying the taxes anyways (or more if rates have gone up).

It's slightly different here, but effectively the same. Individuals get sold on the idea of "tax-back" from the taxation authority at the end of the year... They get bombarded by financial consultants that tell them they have to put up to 30% of their post-tax earnings into 401k-type accounts because they are "maximizing" their "tax-benefits".

A lot of them even have no idea that they will be taxed anyways when they withdraw.

Which, not coincidentally, is also what the companies stashing profits overseas hope to accomplish through future changes in the tax law.