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Pity the billionaires, for they are losing hope and falling into a pit of darkness and despair. Alas! They're losing hope they will get any tax breaks in the coming year or get a chance to lower the corporate tax rate.
Corporate tax executives are overwhelmingly doubtful that the U.S. corporate statutory tax rate will come down this year and worry that lawmakers might instead look to raise revenue by targeting loopholes, deductions and overseas income.
Just 2% of tax executives now believe comprehensive tax reforms that would address the overall corporate rate will be enacted this year, down from 31% who expected significant reforms in 2013 last year, according to a recent survey of 163 business tax executives released by law firm Miller & Chevalier and the National Foreign Trade Council this week.
Oh, dear. What's behind this sudden spate of weeping and gnashing of teeth? Well, it appears that CEOs actually thought that this Congress, with all of the wingnuts they helped to elect, might actually pass some form of corporate tax reform that included an overall lower rate.
They need a lower tax rate, you see, because they've squeezed every last drop out of the economy -- and consumers, in particular. In order for their bottom lines to continue to rise and serve the shareholders properly with out-of-proportion returns, they've got to find a balance sheet entry they can reduce. Snap! Reserves for taxes! That ought to do it.
Cisco CEO John Chambers went on a tear last week, declaring a moratorium on any new acquisitions in the United States until tax rates come down. That translates for rational people into a simple "I'm holding my breath until I turn blue" tactic, which should receive a properly resolved response of "have at it, John." But he's not the only one:
RESEARCH TRIANGLE PARK, N.C. — John Chambers, never the one to mince words and who openly campaigned for Republican Mitt Romney last fall, is stepping up his threats against Congress and the Obama Administration.
Lower corporate taxes, he says, or he simply won't create any more jobs in the U.S.
Other companies are on the record as lobbying for lower corporate taxes or they, like Cisco, will keep profits estimated at a whopping $1.7 trillion "parked" overseas to avoid U.S. taxes. Cisco alone is sitting on $46 billion in cash, some 80 percent of it offshore.
As CNBC noted, Microsoft has 87 percent of some $67 billion outside the U.S.
Oracle is keeping 87 percent of $32 billion away from the U.S.
And Apple tops them all with some 68 percent of $121 billion kept from U.S. tax coffers.
These firms simply won't "repatriate," as they call it, the profits until changes are made.
Given the state of government in Washington, we can expect Cisco's 5,000-employee campus in RTP - its second largest - NOT to grow bigger anytime soon.
"Tax policy will determine where our growth and head count will be," Chambers told CNBC in an interview last Wednesday as Cisco disclosed quartertly earnings.
Not consolidating more tech under Cisco's umbrella is actually a good thing, as far as I'm concerned.
As for the corporate hissy fits, wait them out. They're just trying to scare people into pressuring Congress to do their bidding. There are millions -- even billions -- of reasons not to.