Global CIO: Cisco's Chambers Calls Out Obama's Job-Killing ProtectionismGlobal CIO: Cisco's Chambers Calls Out Obama's Job-Killing Protectionism

Cisco Systems Inc. Chief Executive Officer John Chambers said high U.S. taxes are the main driver behind the San Jose company's $40 billion in cash overseas and suggested the country's opportunity to "bring back the cash" may be limited.

Foreign governments will eventually move to take more of the trillions of dollars U.S. companies have placed abroad, Chambers said Friday following a speech to Boston College's Chief Executives' Club.

"That window will come closed over time," Chambers said, without giving a more specific timeline.

And then there are these comments from Chambers during a video interview with CNBC following Cisco's stellar earnings report last month (from my transcription of his comments):

"We're gonna continue to be very aggressive in acquisitions on a global basis. Most of our cash is outside the U.S.—I think the U.S. is making a mistake by not encouraging companies to bring it back and invest in the U.S., but assuming they don't do that we'll continue to spend the money outside the U.S."

And also from the Bernstein investors conference, Barron's offered this perspective:

"Chambers said he expects the $8 billion in cash the company has inside the U.S. will be used for acquisitions and share repurchases. Cash held overseas will be reinvested outside the U.S. if it cannot be repatriated at favorable tax rates. Repatriated cash could be used to the fund a dividend."

What we've all got to bear in mind here is that this isn't just some theoretical exercise—Cisco has said it will be hiring 3,000 new employees, and that it added about 1,000 of that total in its just-completed quarter. And Chambers' comments highlighted above clearly state that with the current U.S. corporate tax policy, he will take his hiring elsewhere.

So we've got one of the most successful CEOs of this generation saying his company's currently growing at a 25% clip, and that Cisco over the next several years should consistently deliver annual growth of 12% to 17%--and most of that benefit will accrue outside the U.S. because the taxation costs of doing business here have simply become too steep.

Cisco's got lots of options—at least 100 countries around the world would tie themselves in knots to get more of Cisco's investment dollars, people, and opportunities. And as any smart and responsible CEO would do, John Chambers is voting with his wallet and his feet by investing in those countries from which his company, his customers, and his shareholders will gain the greatest returns.

The United States is not one of those countries. And that's not Cisco's fault—that's our fault. And I salute John Chambers for his persistent efforts to talk some sense to our lawmakers before it's too late.

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