Tech companies like Cisco are salivating at the idea that under the Trump administration, they will be able to bring back their hoards of overseas cash for much lower taxes.
And they are hopeful that Trump will pass tax reform that will reduce corporate taxes forevermore.
But they are also worried that Trump’s administration will severely clip their ability to hire worker from overseas and import them to the US under the H-1B visa program. Tech CEOs say there just aren’t enough people in the US who are trained in the highly skilled tech and engineering jobs they have open, and they need to be free to hire from a global pool of talent.
There’s one company in particular that represents both of these concerns completely: Cisco. Cisco’s previous CEO, John Chambers, currently executive chairman, lobbied incessantly for years for a “repatriation holiday” — the ability to bring back cash stored overseas for a low tax rate.
At the same time, Cisco ranks at No. 65 of the top 100 users of H1-B visas, according to a MyVisaJobs.com.
So, on Tuesday at Business Insider’s Ignition conference in New York, Cisco CEO Chuck Robbins was asked about working with the incoming president elect on these issues.
Robbins reiterated his hope that corporate taxes would be cut.
“For us, tax reform is needed and it’s important I think it will benefit everyone, not just us,” he said.
Cisco’s effective tax rate has been about 15% for the past two years, according to CSI Market. And its offshore cash hoard is the third largest among tech companies, after Apple and Microsoft, with about 90% of its $71 billion offshore. Currently, if Cisco brings that money back for an acquisition, to pay investors dividends, or issue stock or bonuses to employees, it will be subject to the 35% corporate tax rate.
So what about the H1-B issue?
Although Trump’s proposed Attorney General, Senator Jeff Sessions, has been a long-time opponent of H1-B use, Robbins is hopeful that Trump can still be convinced to increase the program rather than gutting it.
Robbins said (emphasis ours):
“The immigration issues, the H1-B issues, those are very important to us as well. We’re just not graduating enough highly skilled engineering students in this country.
“What we’ve seen from the President-elect to date is the willingness to have a very logical discussion. He’s committed to pro-business and growth in the United States. If you can make your case that whatever your issue is is an enabler of that, I think he’s going to be willing to listen.”
Those discussions are set to begin on Wednesday, Robbins said. Robbins, along with other members of the business community, will be gathering in Washington for a “business roundtable session,” he said.
It’s not a direct meeting with Trump but with Vice President-elect Mike Pence, along with Senate Minority Leader Chuck Schumer and House Speaker Paul Ryan.
The object of these meetings are to find areas where business leaders and government leaders can work together on economic issues.