New York, NY (PRWEB) November 21, 2012
Investment Contrarians, an e-letter of Lombardi Publishing Corporation, a 26-year-old consumer publisher that has served over one million customers in 141 countries, reports that while the U.S. has experienced some economic improvement, there is room for significant growth, not only with job creation, but also in the form of a fundamental restructuring of the U.S. economy. In spite of America’s improving jobless numbers, unfavorable corporate tax policies are hindering domestic growth, says financial analyst Sasha Cekerevac.
In a recent article, Cekerevac notes that for America’s domestic front to grow, the U.S. needs to understand that it is part of the global economy, and cannot create jobs in isolation.
Cisco Systems, Inc. CEO, John Chambers, has been quite vocal about how the U.S. tax policy is impacting domestic job creation, according to Cekerevac. “During Cisco’s current earnings quarter, in which the company beat expectations, it was interesting to hear his comments regarding job creation, and how the company sees the global economy.”
Eighty-two percent of Cisco’s $45.0 billion in cash is not in America. The extremely high corporate tax rates are, Chambers says, preventing the firm from bringing these funds into America to help spur domestic job creation.
In an interview with Maria Bartiromo on CNBC, Chambers said the company is looking around the world for the most attractive areas to conduct business. He specifically points out that Cisco will be spending its money in Canada, because that country has better corporate tax rates, and is generally an easier place to conduct business. (Source: “Cisco’s Chambers: If No US Compromise We Will Invest Overseas,” video interview, CNBC, November 13, 2012.)
“We have to realize that we’re living in a global economy. And, it’s the fiduciary duty of any businessperson to do what’s best for the company. With America having the highest corporate tax rate in the world at 35%, the question isn’t why are companies leaving, but rather: why aren’t more firms moving abroad?” Cekerevac states.
“For example, Canada’s federal corporate tax rate is 15%. There are no language barriers, no differences in patent law, and the government encourages businesses to grow and expand. And, this is only one country; how many other countries are trying to attract businesses that will lead to job creation?
“This is the problem with politicians who believe that they can force companies into job creation. America is part of the global economy. The solution to job creation is to determine what’s best for building strong companies. Because, only strong companies that grow will be involved in job creation,” he adds.
According to Cekerevac, if one creates an environment that penalizes growth, versus other countries that reward it, the natural result will be a decline in revenue as people and businesses depart. “We’re talking about billions upon billions of non-taxpayer dollars sitting idle in foreign countries because the current system penalizes repatriation,” he says
“America can no longer sit back and assume job creation will happen naturally. The politicians need to create a favorable environment to make America competitive within the global economy. Whether we like it or not, we are competing with every major industrial nation in the world in order to build strong companies and drive job creation. America is still a leading nation, but more needs to be done to ensure the U.S. remains a leader in the next century,” Cekerevac concludes.
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