This is a rush transcript from "Your World," July 25, 2014. This copy may not be in its final form and may be updated.
(BEGIN VIDEO CLIP)
PRESIDENT BARACK OBAMA: Even as corporate profits are higher than ever, there's a small but growing group of big corporations that are fleeing the country to get out of paying taxes. And I'm not interested in punishing these companies, but I'm interested in economic patriotism.
(END VIDEO CLIP)
NEIL CAVUTO, HOST: So, I want to get this straight. Businesses paying high taxes patriotic, not paying them unpatriotic, trying to stay in business essentially unpatriotic.
Now, even if those same businesses can use the money they save to create more jobs in this country, nevertheless unpatriotic. The people getting those jobs, paying more taxes in this country, which would seem to strike me as patriotic.
Former Heinz CEO Bill Johnson says it's not way to treat job creators, regardless of what your opinions are on this issue.
Why do they do this, though? Why does the White House go after companies that do this, take advantage of this inversion corporate trick he calls it that allows them to buy a smaller foreign player, make that their domicile, and pay a lot less in taxes? Why do they do it?
BILL JOHNSON, FORMER CHAIRMAN & CEO, H.J. HEINZ COMPANY: Well, Neil, it's easy to vilify businesses and to try to take populist rhetoric and throw them at the business community because nothing else is getting done anywhere else, and business has always been a pretty easy target to get at.
So, I think it's really nothing more than politics.
CAVUTO: What I always wonder on these and everything -- look, businesses are in the business to make money. You did a very good job of that at Heinz, and you had -- I think you were in every country on Earth.
But these are basic business decisions. You can be patriotic, but also want to be loyal to your workers and your shareholders, but that part of the equation doesn't come into play. You can be patriotic all you want, but if you don't have a company in the end, it really doesn't do much good singing "Yankee Doodle Dandy," does it?
And I think the American tax code puts U.S. businesses at a great disadvantage competitively vs. people in other countries around the world and it actually also puts the consumer at a disadvantage, because the higher the tax, the greater the price passed on to consumers.
It puts labor at a disadvantage because, if the tax rate gets too high, and you can't create the profit growth you need, then you reduce employment. And obviously shareholders pay a price if the tax rate gets too high and profits fall.
So I think ultimately this doesn't affect jobs in the U.S. when companies repatriate or go somewhere else for tax basis, because they add - - eventually add more jobs back into the U.S. But think of all the cash that we could repatriate, Neil, with a change in the tax code in the United States.
There's several trillion dollars sitting overseas that could be invested in capital, could put to use to create jobs, could pay dividends, which, by the way, we pay taxes on. It could be used to do great things and improve the productivity.
CAVUTO: No, no, you're making way too much sense. The fact of the matter is, if businesses that are doing this -- and not many are taking advantage of this particular thing -- but they're doing it because it is prohibitive cost-wise to continue functioning as they are in the United States.
Our rates are such they have to find alternatives. It seems to me that the easier solution would be cut down on the regulations, cut down on the taxes and they will stay here. They're in it to make a buck. There's nothing wrong with that. So if it's easier to make that buck abroad and not break the bank, that's what they will do. It's human nature. Compel them to come back. And they don't.
JOHNSON: I agree, Neil. Well, I totally agree. I think the whole tax structure in the United States needs to be changed and I think tax holidays are nice as a one-off, but they don't fundamentally alter the environment for American companies to be more productive and competitive.
CAVUTO: Well, does it make them angrier, Bill? When you were running Heinz, does the president lecturing you or lecturing an industry, or going after, get you to the point where you say, well, you're not making friends with me and you're not making my job easier and I'm not necessarily going to do the kind of things you want me to do because you have poisoned the well?
JOHNSON: Well, I did things that were in the best interests of our employees and the shareholders, Neil. That's what a good CEO gets paid to do.
I pretty much ignored the rhetoric coming out of Washington, because frankly it's not very helpful to anybody and it's never very productive. The sad thing is that they're throwing a spear at the great job creators in America and the people who really engage and allow consumers and the population of the United States to improve their lives.
And so you sort of wonder at this. But I think, ultimately, it devolves down into political rhetoric and populism directed at places that they think they're safe to direct it, because literally nothing else is getting done because of the dysfunctionality.
CAVUTO: Create another villain. If you're not generating jobs, create another villain to make it look like they're the reason why.
CAVUTO: Bill, thank you for some clarity. Appreciate it, the former Heinz CEO. I would say, Bill Johnson, he gets it.
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