Newsletters
News & Information for Technology Purchasers NewsFactor Sites:       NewsFactor.com     Enterprise Security Today     CRM Daily     Business Report     Sci-Tech Today  
   
This ad will display for the next 20 seconds. Please click for more information, or scroll down to pass the ad, or Close Ad.
Home Enterprise I.T. Cloud Computing Applications Hardware More Topics...
Eliminate costly downtime!
Find out how with Free White Paper
& enter to win a Samsung Galaxy Note

www.apc.com
Enterprise I.T.
24/7/365 Network Uptime
Average Rating:
Rate this article:  
Cisco: We Won
Cisco: We Won't Hire U.S. Employees Until Tax Code Changes

By Jennifer LeClaire
February 15, 2013 1:42PM

    Bookmark and Share
"Tax policy will determine where our growth and head count will be," said Cisco CEO John Chambers. "I'm a very loyal American citizen and company, but in terms of future growth, unless tax policy changes, you will see that occur outside the U.S....Wherever we acquire is where our head count growth is going to be."
 



Cisco is sitting on a pile of cash -- $46 billion to be exact -- and the networking giant has a history of acquiring smaller technology firms. But if you look closely at Cisco's recent acquisitions, you'll notice a clear trend: Cisco isn't shelling out its multiplied billions to buy companies in the U.S.

There's a good reason for this: the U.S. tax code.

In fact, 80 percent of Cisco's $46 billion in cash is not even in a U.S.-based bank account. When Cisco taps into those deposits to spend money in America, it comes with a hefty 35 percent tax bill.

John Chambers, CEO of Cisco, has been vocal over the years about the tax code. In fact, he's been somewhat of an activist. He's tried to change it. He's sent clear messages to the government that high taxes keep him from hiring more workers stateside.

Chambers Throws Down Gauntlet

Now, Chambers is upping the ante in his face-down with the U.S. government. He's made it clear that he won't buy any more U.S. companies -- or hire any more U.S. workers -- until the government relents on its high corporate taxes.

"Tax policy will determine where our growth and head count will be," Chambers told CNBC. "I'm a very loyal American citizen and company, but in terms of future growth, unless tax policy changes, you will see that occur outside the U.S....Wherever we acquire is where our head count growth is going to be. If the majority of our money remains outside the U.S., and this depends on tax policies, that's where you'll see us acquire going forward."

What does Chambers want, specifically? He wants taxes lowered for repatriation, for when his company's cash stores overseas are brought back and spent in the U.S. Actually, he'd prefer a repatriation holiday -- no taxes at all. And Chambers is not alone is his fight.

Will Government Budge?

Zeus Kerravala, principal analyst at ZK Research, told us he's disappointed that the repatriation issue has not yet been addressed, because it could stimulate economic activity in the U.S.

"Now that the election is over, the Obama administration may consider making a change. It's been a hot-button issue for some time. I'd expect a Republican administration more so than a liberal one, but I am hopeful they will pass repatriation," Kerravala said. "The Obama administration's track record would indicate they may not make any change. But they are also feeling pressure from companies like Oracle and Microsoft to make this move."

Although Kerravala doesn't agree with tech giants skipping out on tax bills completely, he called the corporate 35 percent tax rate "ridiculous." He would like to see the government find a compromise somewhere between no tax and a 35 percent tax.

"We're at a tax rate where they are not going to do it. So you are holding out hoping you get some tax money from repatriation but they are not going to. So if you lower the tax rate at least you get something," Kerravala said. "If you don't, you get nothing and you hamstring the larger U.S. companies and create a bit of an unfair competitive environment with foreign companies."
 

Tell Us What You Think
Comment:

Name:

Brad:

Posted: 2013-06-01 @ 7:25am PT
I don't understand why millionaires only pay less then 15% in capital gains but a US corporation investing in the US pays up to 35%. There is to much disparity. I say bring the tax to 18% for both.

Tom,Southerner:

Posted: 2013-05-07 @ 2:16pm PT
Meanwhile, Obama supporters Google and GE make billions and pay no taxes.

John, American:

Posted: 2013-02-20 @ 10:16am PT
Be careful Cisco if you want to play like that. There are other vendors out there.

Editor:

Posted: 2013-02-15 @ 2:36pm PT
Thank you, we've made the correction.

Corbin:

Posted: 2013-02-15 @ 2:20pm PT
While $46 million is a lot of money, it would be a very tiny amount for Cisco. The article should be $46 BILLION in cash. You mention million several times.



APC has an established a reputation for solid products that virtually pay for themselves upon installation. Who has time to spend worrying about system downtime? APC makes it easy for you to focus on business growth instead of business downtime with reliable data center systems and IT solutions. Learn more here.


 Enterprise I.T.
1.   Zebra Buys Motorola Enterprise Biz
2.   NSC Backs Disclosing Vulnerabilities
3.   Salesforce To Dominate S.F. Skyline
4.   Heartbleed Bug Could Disconnect IoT?
5.   Heartbleed Bug Jolts IT Admins


advertisement
Zebra Buys Motorola Enterprise Biz
Pays $3.45B in all-cash deal.
Average Rating:
Google Glass Finds a Home in Medicine
Hands-free information access a boon.
Average Rating:
Salesforce Gets Industry Specific
Connected cloud tools for six verticals.
Average Rating:
Product Information and Resources for Technology You Can Use To Boost Your Business

Network Security Spotlight
IBM Offers Security, Disaster Recovery as SoftLayer Service
New disaster recovery and security services for SoftLayer clients are being added by IBM. Big Blue said the new capabilities will speed cloud adoption by alleviating concern over business continuity.
 
How To Beat the Heartbleed Bug
Heartbleed headlines continue as IT admins scramble for answers no one has. Early reports of stolen personal data, including 900 social insurance numbers in Canada, are starting to trickle in.
 
After Heartbleed, OpenSSL Calls for More Support
The president of the OpenSSL Foundation says more support is needed from companies and governments that use its software so that it can better spot and fix flawed pieces of code such as Heartbleed.
 

Enterprise Hardware Spotlight
Vaio Fit 11A Battery Danger Forces Recall by Sony
Using a Sony Vaio Fit 11A laptop? It's time to send it back to Sony. In fact, Sony is encouraging people to stop using the laptop after several reports of its Panasonic battery overheating.
 
Continued Drop in Global PC Shipments Slows
Worldwide shipments of PCs fell during the first three months of the year, but the global slump in PC demand may be easing, with a considerable slowdown from last year's drops.
 
Google Glass Finds a Home in Medical Education, Practice
Google Glass may find its first markets in verticals in which hands-free access to data is a boon. Medicine is among the most prominent of those, as seen in a number of Glass experiments under way.
 

Mobile Technology Spotlight
Amazon 3D Smartphone Pics Leaked
E-commerce giant Amazon is reportedly set to launch a smartphone after years of development. Photos of the phone, which may feature a unique 3D interface, were leaked by tech pub BGR.
 
Zebra Tech Buys Motorola Enterprise for $3.45B
Weeks after Lenovo bought Motorola Mobility’s assets from Google for $2.91 billion, Zebra Technologies is throwing down $3.45 billion for Motorola’s Enterprise business in an all-cash deal.
 
CTIA Caves, Volunteers Kill Switch Plan
After bucking against the concept of a smartphone kill switch, the CTIA just announced the “Smartphone Anti-Theft Voluntary Commitment” to thwart smartphone thefts in the U.S.
 

Navigation
NewsFactor Network
Home/Top News | Enterprise I.T. | Cloud Computing | Applications | Hardware | Mobile Tech | Big Data | Communications
World Wide Web | Network Security | Data Storage | Small Business | Microsoft/Windows | Apple/Mac | Linux/Open Source | Personal Tech
Press Releases
NewsFactor Network Enterprise I.T. Sites
NewsFactor Technology News | Enterprise Security Today | CRM Daily

NewsFactor Business and Innovation Sites
Sci-Tech Today | NewsFactor Business Report

NewsFactor Services
FreeNewsFeed | Free Newsletters | XML/RSS Feed

About NewsFactor Network | How To Contact Us | Article Reprints | Careers @ NewsFactor | Services for PR Pros | Top Tech Wire | How To Advertise

Privacy Policy | Terms of Service
© Copyright 2000-2014 NewsFactor Network. All rights reserved. Article rating technology by Blogowogo. Member of Accuserve Ad Network.