John Chambers, never the one to mince words and who openly campaigned for Republican Mitt Romney last fall, is stepping up his threats against Congress and the Obama Administration.

Lower corporate taxes, he says, or he simply won’t create any more jobs in the U.S.

Other companies are on the record as lobbying for lower corporate taxes or they, like Cisco, will keep profits estimated at a whopping $1.7 trillion “parked” overseas to avoid U.S. taxes. Cisco alone is sitting on $46 billion in cash, some 80 percent of it offshore.

As CNBC noted, Microsoft has 87 percent of some $67 billion outside the U.S.

Oracle is keeping 87 percent of $32 billion away from the U.S.

And Apple tops them all with some 68 percent of $121 billion kept from U.S. tax coffers.

These firms simply won’t “repatriate,” as they call it, the profits until changes are made.

Given the state of government in Washington, we can expect Cisco’s 5,000-employee campus in RTP – its second largest – NOT to grow bigger anytime soon.

“Tax policy will determine where our growth and head count will be,” Chambers told CNBC in an interview last Wednesday as Cisco disclosed quartertly earnings.

Chambers’ threat – coming next – evaded most newscasts and news reports. But his soundbite is worth reading and remembering.

“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.”

Wow.

Washington makes tax policy but it can’t make companies hire, Chambers is saying.

And as long as international laws aren’t changed, either, companies such as Cisco will keep profits “parked” overseas so they aren’t returned to the U.S. to be taxed at a rate of 35 percent.

Cisco has made two acquisitions so far this year, and both have been overseas – one in Israel, the other in the Czech Republic. 

Warning Signs in Europe

Chambers is the most outspoken when it comes to the issue in the U.S., but corporate taxation challenges aren’t limited to the U.S.

The G-20, or Group of 20 industrial nations, has been called upon by Britain, Germany and France to “curb tax avoodance,” as Bloomberg news termed corporate policies of finding ways to report profits in low-tax countries and keep money away from tax collectors. 

“The Organization for Economic Cooperation and Development is working on plans which, if approved by the U.K., Germany and France, will be put before the G-20 in July,” Bloomberg reported Monday.

U.K. Prime Minister David Cameron issued another warning today in India.

“There has been a problem in this debate in the past in that people have said: ‘Well of course there is a difference between tax evasion, which is illegal and should be pursued by the full force of the law, and then there is tax avoidance which is perfectly legal and OK,’” Cameron said.

“The problem with that is that there are some forms of tax avoidance that have become so aggressive that I think there are moral questions we have to answer about whether we want to encourage or allow that sort of behavior.”

This tax battle is going to turn into a war.

Companies may lose and be forced to pay more.

But can they be forced to create jobs?

How To Spend Cash

In a conference call with analysts, Chambers returned to the tax issue.

“In terms of our growth, we’re completely committed to giving and back as our shoulders deserve over 50 percent of our cash generation,” he explained.

“We want to see what happens in the tax regulations, and then candidly I don’t have a really disposition this.

“We’re going to turn to our shareholders and say what you want us to do? Do you want a share buyback or do you want it in terms of dividend.

“We clearly would not have started our dividend payments, if we didn’t over time anticipate them going longer, but I think we all want to see what happens to tax policy here and then as that becomes clear they might turn to our shareholders and ask you what you want us to do.”

Will shareholders want to pay more taxes?