........CISCO TO CUT 10,000 JOBS WHILE LOBBYING FOR TAX BREAK
According to Bloomberg:
Cisco Systems Inc. (CSCO), the largest networking-equipment
company, may cut as many as 10,000 jobs, or about 14 percent of its
workforce, to revive profit growth, according to two people familiar
with the plans. The cuts include as many as 7,000 jobs that would be eliminated by
the end of August, said the people, who asked not to be identified
because the plans aren’t final. Cisco is also providing early-retirement
packages to about 3,000 workers who accepted buyouts, the people said.
Cisco's CEO is the ninth highest paid
in America, with one-year total compensation of $37.9 million. But by
corporate logic, the way to make the company more profitable is to get
rid of thousands of workers' jobs without dinging the tens of millions
of dollars in pay for the guy who's ultimately in charge.
The other big mainstay of corporate logic, of course, is that there's
nothing some extra tax cuts won't make better, and Cisco is hewing to
that as well. Think Progress
reports that Cisco is part of a group of corporations calling
themselves Win America to argue for a corporate repatriation tax holiday,
in which corporations would get to bring money they've stashed overseas
to the U.S. at a sharply reduced tax rate.
Cisco has an effective tax rate of 19.8 percent and has avoided $7 billion in taxes since 2005.
A tax repatriation holiday would be a massive windfall for a few
corporations like Cisco. But it would be bad news for the national
budget and by extension for the rest of us. The Center on Budget and Policy Priorities explains:
a new tax holiday would increase budget deficits by tens of billions of
dollars over the coming decade. And unlike the 2004 repatriation
holiday, which was sold as a “one-time-only” event, a second holiday
would send a powerful message to corporations to shift investment and
jobs overseas and hold the profits there — until yet another tax holiday
is declared. Indeed, enactment of another such tax holiday would
further embed the shifting of investment, jobs, and profits overseas as a
major tax avoidance strategy for many U.S. multinational corporations.
That's after the 2004 holiday was terrible for workers:
The evidence shows that firms mostly used the repatriated earnings not
to invest in U.S. jobs or growth but for purposes that Congress sought
to prohibit, such as repurchasing their own stock and paying bigger
dividends to their shareholders. Moreover, many firms actually laid off
large numbers of U.S. workers even as they reaped multi-billion-dollar
benefits from the tax holiday and passed them on to shareholders.
Lay off workers? Check. Pay your CEO tens of millions of dollars
regardless of what success or failure you're otherwise claiming? Check.
Avoid taxes? Check. Lobby for lower taxes? Check. Yep, Cisco is fully in
tune with the new class war.
