John Chambers, an outspoken supporter of Mitt Romney in the presidential campaign, is never at a loss for words. And on Tuesday he unloaded two broadsides of complaints against current U.S. tax and business policy.
Start changing the way business is handled by government and revamp the tax code or Cisco (Nasdaq: CSCO) will take its billions in profits stashed offshore and invest in jobs overseas.
One prime candidate for future Cisco growth: Canada, where Cisco recently made an expansion announcement. Cisco just happens to operate its second largest campus outside of Silicon Valley in RTP, so when Chambers talks jobs and growth, locals had best be interested. Chambers will be in Raleigh this week to talk at the Hugh Shelton leadership conference at N.C. State. It will be interesting to see if Chambers talks about taxes and U.S. government policy.
In an interview with CNBC shortly after the markets closed Tuesday to discuss Cisco’s better than expected revenues and earnings, Chambers unloaded.
- Canada knows how to do business.
- U.S. taxes on corporate profits are too high.
- While Cisco is a U.S. company, he’s not going to bring home off-short profits to see them gobbled up by the Treasury.
Chambers and other executives has lobbied before for changes in the tax code – so far to no avail. No changes, no “repatriation” of profits. (Those overseas taxes can be low – see this Apple story.)
Later in a conference call, Chambers was asked about the looming fiscal cliff and the ongoing tax debate.
“I personally think the fiscal cliff, we’re going to work through that probably with little bit of saber-rattling on both sides,” Chambers said. But he had a bigger point to make.
“We’re looking more towards the tax policy and if government able to instill the confidence in business that allows and ready to invest,” he warned.
“If I would look at one model, we have to look at very carefully around the world it’s Canada, the easiest place to do business, it doesn’t matter which party is in power, even their provinces or either states.
“When the national government, Prime Minister Harper gets it the leaders in auto will get it, they drive down through and make it very easy do business there. And you’re going to see us grow our business there as well as invest overall.”
Cisco, Apple and other multi-national firms are sitting on off-short profits in mind-boggling figures. And Chambers said that money could be brought back to the U.S. for jobs as well as expansion.
But they won’t do so at the point of a gun.
“So I think it’s one of the businesses confidences,” Chambers explained.
“I do think that is the wild card that can make a difference whether we’re going to grow GDP at a 2 percent, give or take a little bit or get a platform where it belongs to 3 percent plus.
“The company’s do have the cash to spend if they have the confidence to invest.”
But with what’s happening in Washington these days, Chambers obviously is lacking in confidence about where the U.S. is – and where it’s headed.