{"id":5609,"date":"2011-03-07T21:55:40","date_gmt":"2011-03-08T02:55:40","guid":{"rendered":"http:\/\/rbachnet.wwwmi3-ss40.a2hosted.com\/?p=5609"},"modified":"2023-06-19T09:26:30","modified_gmt":"2023-06-19T13:26:30","slug":"tech-titans-talk-tax-cuts-with-potus","status":"publish","type":"post","link":"https:\/\/rbach.net\/index.php\/tech-titans-talk-tax-cuts-with-potus\/","title":{"rendered":"Tech Titans Talk Tax Cuts with POTUS"},"content":{"rendered":"

\"Tech<\/a><\/em>Fortune<\/em><\/a> is reporting<\/a> that a group of tech, pharmaceutical, and energy giants are lobbying for a tax cut<\/strong> that would allow them to bring home the estimated $1 trillion<\/strong> they’ve got parked overseas at a steeply discounted rate. Fortune’s<\/em> sources say that Apple<\/a><\/strong> (AAPL<\/a>), Cisco<\/a><\/strong> (CSCO<\/a>), and Oracle<\/a><\/strong> (ORCL<\/a>)\u00a0 are among the major players looking to win a one-year tax amnesty on their foreign earnings, allowing them to repatriate that money at a tax rate of about 5%<\/strong>, instead of the 35% they face now.<\/p>\n

Multinationals prevailed on Congress to approve a one-year t<\/strong>ax<\/strong> holiday once before, as part of a jobs package in 2004. Back then, the companies argued the relief would help them boost economic growth because they’d plow their repatriated money into research, investment, and hiring. And while plenty of outfits benefited from the break – 843 corporations made use of the holiday, bringing back a total of $362 billion, according to the IRS — the broader economic benefits were dubious<\/strong>.<\/p>\n

The Treasury Department wrote rules trying to make sure that the recovered cash was in fact invested back into the companies. But money is fungible. Although the rules expressly prohibited using the funds for dividend payments or stock buybacks, later analysis has shown participants sent most of it to shareholders<\/strong> anyway. One study cited by Fortune<\/em> from the National Bureau of Economic Research<\/a>\u00a0found that for every dollar of repatriated cash, companies bumped up shareholder payouts between 60 and 92 cents<\/strong>.<\/p>\n

“A tax holiday would bring a substantial amount of cashback to the United States and paying that out to shareholders is good for the economy<\/em>,” said study co-author Kristin Forbes, an economics professor at MIT’s Sloan School of Management and a member of then-President George W. Bush<\/strong>‘s council of economic advisers told Fortune<\/em>. “But if you’re a politician claiming this will create a lot of jobs or new investment, it isn’t supported by the data.”<\/p>\n

In order to sell the deal, Cisco CEO John Chambers<\/a> and Oracle president Safra Catz <\/a>argued in an October editorial<\/a> in the Wall Street Journal<\/em><\/a> that a second holiday would help put Americans back to work. But they don’t promise that companies would drive all of their repatriated money directly into job-creating investments. They acknowledge that companies might pass the money along to shareholders again. But Mr. Chambers and Ms. Catz argue on top of direct investments, the tax cut holiday<\/strong> would spur a new stimulus by boosting markets, thereby increasing consumer confidence. And they say the tax revenue itself could fund $50 billion worth of credits to encourage new hiring — a sum only possible in the unlikely event companies decide to bring home the entirety of their overseas reserves.<\/p>\n

President Obama\u2019s recent dinner<\/a> with Silicon Valley\u2019s tech titans was a star-studded event according<\/a> to TechCrunch<\/em><\/a>.<\/p>\n

\"Obama<\/a><\/p>\n

Invitee included Facebook<\/a> <\/strong>CEO Mark Zuckerberg<\/strong>, Apple<\/strong> CEO Steve Jobs<\/a><\/strong>, Yahoo<\/a><\/strong> (YHOO<\/a>) CEO Carol Bartz, Cisco\u2019s CEO John Chambers, Twitter<\/a><\/strong> CEO Dick Costolo, Oracle CEO Larry Ellison, Netflix<\/a><\/strong> (NFLX<\/a>) CEO Reed Hastings, Genentech Chairman Art Levinson; Google<\/a> <\/strong>(GOOG<\/a>) CEO Eric Schmidt; former state controller and venture capitalist<\/strong> Steve Westly Doerr, and Stanford University<\/a> President John Hennessy. The event was held at Kleiner Perkins<\/a> partner John Doerr\u2019s home.<\/p>\n

After the dinner, White House press secretary Jay Carney said the group talked about ways to invest in innovation and how to increase jobs in the private sector. He said Mr. Obama also discussed proposals to invest in research and development and his goal of doubling exports in five years.<\/p>\n

rb-<\/em><\/strong><\/p>\n

I don’t think it’s unreasonable to assume that what POTUS calls, “increase jobs in the private sector” would mean a “tax cut holiday” for the tech titans.<\/em><\/p>\n

It should be no surprise that the Tech Titans who supped with POTUS were big political contributors and supporters of the tax cut holiday. What happened to “Yes We Can”?<\/em><\/p>\n

 <\/p>\n

Ralph Bach<\/a>\u00a0has been in IT long enough to know better and has blogged from his\u00a0Bach Seat<\/a> about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedIn<\/a>,\u00a0Facebook<\/a>,\u00a0and\u00a0Twitter<\/a>. Email the Bach Seat\u00a0here<\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Tech giants Apple, Cisco, and Oracle are lobbying POTUS Obama for a tax cut on $1 trillion of profits they’ve stashed overseas<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[45],"tags":[3045,420,101,247,487,104,1096,1688,835,507,836,45,1780,254,131,60,2011],"class_list":["post-5609","post","type-post","status-publish","format-standard","hentry","category-politics","tag-3045","tag-aapl","tag-apple","tag-cisco","tag-csco","tag-facebook","tag-fb","tag-holiday","tag-john-chambers","tag-mark-zuckerberg","tag-oracle","tag-politics","tag-potus","tag-steve-jobs","tag-tax","tag-twitter","tag-twtr"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/rbach.net\/index.php\/wp-json\/wp\/v2\/posts\/5609","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/rbach.net\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/rbach.net\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/rbach.net\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/rbach.net\/index.php\/wp-json\/wp\/v2\/comments?post=5609"}],"version-history":[{"count":18,"href":"https:\/\/rbach.net\/index.php\/wp-json\/wp\/v2\/posts\/5609\/revisions"}],"predecessor-version":[{"id":128610,"href":"https:\/\/rbach.net\/index.php\/wp-json\/wp\/v2\/posts\/5609\/revisions\/128610"}],"wp:attachment":[{"href":"https:\/\/rbach.net\/index.php\/wp-json\/wp\/v2\/media?parent=5609"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/rbach.net\/index.php\/wp-json\/wp\/v2\/categories?post=5609"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/rbach.net\/index.php\/wp-json\/wp\/v2\/tags?post=5609"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}