Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: Elmer Flugum who wrote (41124)	10/19/2000 3:46:50 PM
From: RetiredNow	Read Replies (2) \| Respond to of 77400

This is such bs. Where Cisco doesn't pay taxes, the employees pick up the slack. The government is NOT getting cheated, they are still getting their ludicrous share. In addition, in down years on the market and Cisco's stock price, Cisco will get little to no relief via employee exercising of stock options. So Parish and his list of chicken littles are ballyhooing about nothing. Actually, it could be argued that the government is getting more taxes this way in the end. My reasoning is as follows. If the stock runs up tremendously in any given year, lots of employees are likely to cash in, as happened with Cisco in the last couple of years. That means Cisco gets a huge tax break. However, Cisco's marginal tax dollar, meaning the taxes they pay on their last dollar of earnings (or the bracket they are in) is around 40%. On the other hand, the employees who are cashing in may have a substantially higher marginal tax rate, something as high as over 50%. In addition, Cisco's stock flies even higher because they aren't paying a whole lot of taxes and their cash flows are better because of it. This creates a virtuous cycle for government tax revenues. Loophole my ass. It's a win-win-win for Cisco, employees, and the government. It's called wealth creation or net economic gain. Deal with it Parish et al.