Repatriation Tax Overhaul Under Trump Would Give Cisco ‘More Flexibility,’ Says CEO
Were the Trump administration to work out a deal with Congress on repatriation tax reform, that wouldn't be “positioned as a tax holiday,” but “a permanent solution, which we would be very happy with,” Cisco CEO Chuck Robbins told his…
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company’s annual shareholder meeting Monday. Major companies have a lot of money parked overseas that they can’t bring back to the U.S. because it would be taxed at a high rate, and “most of the companies with repatriation money are tech companies,” CTA President Gary Shapiro told us just after the election (see 1611090038). For Cisco, freeing up its repatriation money “would certainly give us more flexibility” to pay for mergers and acquisitions, shareholder dividends and stock buybacks, Robbins said in Q&A. The company would welcome more comprehensive corporate tax law overhaul under the new administration, he said. “Lower corporate tax rates really are the levers for investment in an operating environment,” said Robbins. “That’s actually where I think the jobs get created through that model, because we’re able to invest more, we’re able to put more money into innovation.” There’s also the hope of “returning some portion of that to our shareholders as well,” he said. “So we’re optimistic and we’ll see how it plays itself out.” Robbins sidestepped a question on the impact to Cisco if Trump sparks a trade war with China. The equipment maker does manufacturing in “I want to say, 12 different countries around the world,” so it has a very diversified “supply chain,” he said. “We’ve invested in China from a relationship perspective,” and “relative to our business and the partnerships in China, we’ve actually been very pleased with how it’s played out over the last year,” he said. “We’ll continue to do all the things that we can to ensure that our business in China is successful.”