Johnson & Johnson CFO Dominic Caruso said the U.S. tax reform will make companies more competitive on a global scale.
Caruso and his fellow CFOs in the healthcare and other industries worked "quite a bit on the crafting of legislation that would make us more competitive on a global scale," he said at the J.P. Morgan Healthcare conference in San Francisco on Jan. 8.
The CFO believes this is now a "globally competitive system" that will benefit the U.S. economy and job creation in the country.
Caruso said the company wanted to end the the cash lock out effect so companies would have freedom to access the cash they earned abroad. He said the previous "punitive system of taxation" had the effect of curtailing investment in the U.S. and therefore curtailing jobs in the U.S.
The CFO said that having access to previously trapped foreign earnings reverses the unusual effect of many corporations like Johnson & Johnson having to borrow in the U.S. while having lots of cash outside the U.S.
"So that's an immediate benefit and I think that's a much more efficient way of having a capital structure," Caruso said.
However, the drugmaker's primary focus on allocating capital, after investing in its business, continues to be through its dividend. "I don't think it changes our overall capital allocation strategy," the CFO said.
