While Cisco (CSCO +2.2%) has $45B in cash and investments on its balance sheet, good for a net...

While Cisco (CSCO +2.2%) has $45B in cash and investments on its balance sheet, good for a net cash position of $30B, only $4B of these assets are onshore. If its offshore assets were repatriated today, without a tax holiday, Cisco would be left with $15B in net cash. This $15B difference is equal to about $3/share in Cisco's valuation. (previously)

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Comments (2)
  • kmi
    , contributor
    Comments (4584) | Send Message
    Let me rephrase.


    Cisco has avoided paying taxes by using the 'permanently invested offshore' exemption on something like $26b.


    Had it actually had to pay taxes like its domestically domiciled small business brethren who can't take advantage of international structures to avoid paying taxes in the same way, it would only have $15b in net cash, and the government would have collected $11b on taxes that small business here in the US can't avoid paying.


    Should CSCO put enough money in the right pockets, it may be able to buy itself a 'tax holiday' at a fraction of that $11b.


    Yeah, thanks.
    13 Sep 2011, 03:01 PM Reply Like
  • gmcleod752
    , contributor
    Comments (151) | Send Message
    Here's a great article on this topic by the Washington Post




    Here's a suggestion, provide preferential treatment to companies that sell to the USA Government based on their lower levels of cash parked outside the USA. Just take a look at off shore cash divided by current annual sales, the lower the number the better. Companies that pay more USA tax effectively reduce the price that the GOV would pay for a product. This would encourage competition and favor USA made in America without adding a tariff.


    As I recall, CISCO also lobbied for a tax holiday about 10 years ago, this was passed by congress / signed by pres and had zero value to increasing jobs. The specific goal of this past event as I recall was to help increase jobs, and that didn't have any impact.


    Here's a very detailed analysis of this issue.


    8 Dec 2011, 01:19 PM Reply Like
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