Search
Homepage Rankings and Research Companies Channelcast Marketing Matters CRNtv Events WOTC Jobs Cisco Partner Summit Digital 2020 Lenovo Tech World Newsroom Dell Technologies World Digital Experience 2020 HPE Zone Masergy Zenith Partner Program Newsroom Intel Partner Connect Digital Newsroom Dell Technologies Newsroom Fortinet Secure Network Hub IBM Newsroom Juniper Newsroom The IoT Integrator Lenovo Channel-First NetApp Data Fabric Intel Tech Provider Zone

Trump's Tax Repatriation Would Spur Massive Growth For Cisco And Its Channel, Say Partners

Partners are bullish on the economic boost a tax repatriation would give to Cisco and its channel community, as Cisco CEO Chuck Robbins is slated to speak with President-elect Donald Trump next week.

As Cisco Systems CEO Chuck Robbins prepares to meet with President-elect Donald Trump next week, the company's partners are bullish that Trump's proposed tax repatriation plan will spur massive growth for Cisco and its U.S.-based partners.

"Repatriating capital is going to give American corporations a new chance to be effective and profitable in the U.S. and it's going to help the American worker, it's going to help the Cisco VAR, and it's going to help us all to grow," said Phil Mogavero, vice president of Advanced Technology Group network solutions and regional chief technology officer at El Segundo, Calif.-based PCM, ranked No. 28 on the 2016 CRN Solution Provider 500 list.

Mogavero said incentivizing technology giants such as Cisco, Apple and Oracle to bring back their billions currently overseas into the .US. through a one-time special tax rate would almost immediately spur economic growth within the channel community.

[Related: Huawei On Fire, Cisco Slips As Switch And Router Market Grows To $9.9 Billion In Q3]

In a recent interview with CNBC, Robbins said if Cisco repatriatse its more than $60 billion overseas capital back into the U.S., it would spur "a combination of dividends, buybacks as well as M&A activity."

"It would create jobs for Cisco, but also beyond that. … If we were to increase our dividend, then that flows through the mutual funds, which flows through to the middle class America, which flows through to make people feel better about their income. … I think all that is good for business," said Robbins.

Robbins is just one of several top technology leaders Trump's team has reached out to to attend a roundtable discussion Dec. 14 in New York, although an agenda and the executives who will be attending the meeting has yet to be released. Oracle, which also has billions overseas, confirmed to CRN that Co-CEO Safra Catz will be attending the meeting.

Trump has called for decreasing the U.S. corporate income tax rate from 35 percent – one of the highest rates in the world -- to 15 percent to boost hiring, innovation and expansion in the U.S. He also has advocated for a special tax holiday where corporations with overseas cash, like Cisco, would pay a tax rate of 10 percent on that income in an effort to bring the money back into the U.S.

"There's no denying that it would be a game-changer for Cisco -- absolutely," said Bill Smeltzer, chief technology officer of Seabrook, N.H.-based Focus Technology Solutions, a Cisco partner ranked No. 396 on the 2016 CRN SP500. "Cisco in terms of their speed of innovation and their whole build, buy, acquire that they've practiced, if they're able to speed the innovation of that up, it's a win for all Cisco partners and a win for consumers too."

The combined cash overseas from Apple, Cisco, Microsoft, Oracle and Google will total more than $500 billion by the end of 2016, according to a report by Moody's Investor Service. Smeltzer said if those companies moved their billions back into America, the benefit to the channel "would be phenomenal."


During Cisco's first fiscal quarter earnings report, Robbins said political uncertainly in global markets is causing service providers to slow down spending -- prompting the San Jose, Calif.-based networking giant to project as much as a 4 percent revenue decline for its upcoming second fiscal quarter.

In his interview with CNBC, Robbins said, "When there's uncertainty, companies don't spend and so the more clarity we have, which is the other reason I'm excited about this session next week -- regardless of your political views -- we can begin to get some clarity."

PCM's Mogavero said less regulation on businesses is key on many levels.

"Repatriating capital, that's simply math from my perspective because if you have billions of dollars just sitting in international markets and you can't bring it back because of the taxation, and now you say, 'We can bring it back and you're going to have either no taxation or much lower taxation' then you're going to stimulate investment and investment is going to lead towards more jobs in the U.S. and more growth in the U.S. and higher wages," he said. "We're going to give American workers a chance now because with less regulation, by not having to move that money offshore and move those jobs offshore, we can be much more competitive."

Back to Top

Video

 

trending stories

sponsored resources