Meg Whitman likes Trump's plans to chop taxes on offshore cash

Like many leaders of large corporations, Hewlett Packard Enterprise CEO Meg Whitman would like to be able to bring back the company's large stash of offshore cash to the US at a low tax rate.

President-elect Donald Trump has proposed allowing companies to do that at a 10% tax rate instead of the 35% standard corporate tax rate. He's also proposed lowering that corporate rate from 35% to 15%.

Not that every corporation pays 35%. HPE's fiscal 2016 tax rate was 22.5%, it reported on Tuesday.

Whitman, not surprisingly, would like to spend the company's offshore cash in the US at that lower tax rate. HPE has about $10 billion in cash. When asked about Trump's policies on CNBC's "Squawk on the Street" she said (emphasis ours):

Corporate tax rate reductions to make us more competitive on a world stage would be helpful. A tax holiday on all the cash that we have overseas, bringing that back at a 10% rate, that would be helpful to us as well.

It would make America a more tax competitive place to be. And we, like so many companies, not just tech companies, we have a lot of cash offshore, which we would bring back, which we would either use for investment or to share buyback or repurchase. So those two things would be very helpful to Hewlett Packard Enterprise and I think business in general.

Multi-national corporations like HPE, Apple, Microsoft, Cisco, and others wind up with billions in offshore accounts in a couple of ways, such as from selling their products overseas. The US doesn't tax the income made by US companies if it's generated overseas and kept there. It only wants its cut when they spend that cash in the US on things like acquisitions, dividends, share buybacks.

Companies also wind up with cash offshore because they use the tax code to assign portions of their revenue to overseas operations. That keeps them from paying US taxes, but it also leaves them with the money stuck overseas. That's why so many of them have been pushing for this tax holiday.

The argument in favor of a low tax-rate holiday is that instead of paying taxes, they'll invest in their businesses, which will create jobs.

Job creator or killer?

However, some research into the last tax holiday showed that it doesn't necessarily work out that way. A study of the 15 companies that benefited the most from a 2004 tax holiday cut more than 20,000 net jobs, increasingly moved jobs offshore and increased executive paychecks, The Wall Street Journal reported back in 2011. Hewlett-Packard was among the top companies that brought money back at that time.

Since that last holiday, corporations have stockpiled about $2.4 trillion offshore, The Citizens for Tax Justice reports, and some CEOs have been actively been pushing for another tax Holiday. 

That's not to say Whitman is a fan of all of Trump's proposals. She also told CNBC:

"Some of the trade issues around putting a big tariff on goods that are made outside the United States coming into the United States would be problematic. We'd have to completely change our supply chain. And then finally, immigration. You know, H1-B visas are very important to the technology industry. And if those visas were limited dramatically, we'd have to rethink how we did R&D."

Whitman is a Republican who famously opposed Trump during the election and campaigned for Hillary Clinton. When Trump won the election, she said that she was disappointed but ready to give him "benefit of the doubt and the opportunity to demonstrate that he can lead our diverse nation."

And on CNBC she just repeated that "I, for one, am ready to support the President."

Here's the interview.