Intel CEO: U.S. faces looming tech decline

[HydraBob]

news.cnet.com/8301-13578_3-20014563-38.html?tag=mncol;1n

Take factories. “I can tell you definitively that it costs $1 billion more per factory for me to build, equip, and operate a semiconductor manufacturing facility in the United States,” Otellini said.

The rub: Ninety percent of that additional cost of a $4 billion factory is not labor but the cost to comply with taxes and regulations that other nations don’t impose. (Cypress Semiconductor CEO T.J. Rodgers elaborated on this in an interview with CNET, saying the problem is not higher U.S. wages but antibusiness laws: “The killer factor in California for a manufacturer to create, say, a thousand blue-collar jobs is a hostile government that doesn’t want you there and demonstrates it in thousands of ways.”)
…
“Our corporate tax rates are the second highest in the world,” and Congress has repeatedly failed to make an R&D tax credit permanent, Fiorina told the Aspen audience. It’s time to start “acknowledging the reality that companies go where they’re welcome,” she said. (The effective U.S. corporate income tax is 35 percent, far over the industrialized-nation average of 18.2 percent.)

The problem isn’t higher wages in the US, it’s because the government is anti-business.

 

[RoncalliM]

You sure about that? From Forbes:

"The most egregious example is General Electric ( GE - news - people ). Last year the conglomerate generated $10.3 billion in pretax income, but ended up owing nothing to Uncle Sam. In fact, it recorded a tax benefit of $1.1 billion. "

Intel is just playing a PR game.

 

[Ridgerunner]

You sure about that? From Forbes:

"The most egregious example is General Electric ( GE - news - people ). Last year the conglomerate generated $10.3 billion in pretax income, but ended up owing nothing to Uncle Sam. In fact, it recorded a tax benefit of $1.1 billion. "

Intel is just playing a PR game.

Maybe. And maybe GE is simply better at gaming the system. But that doesn’t mean that those who don’t have the power to game it better couldn’t use some more equitable form of relief.

I’m not a tech person. But if you talk to some community banker nowadays, he can tell you a number of ways in which he, with no political clout, is up against politically-won competitive advantages of the “too big to fails”.

I recall hearing some commentator or other talk about the hundreds and hundreds of “earmarks” in the various codes, including the tax code, that few know about because they don’t have the “media romance” of talking about things like grants to study, e.g., ancient Polynesian sailing methods or the sex life of some obscure salamander. Possibly the man exaggerated, but he calculated that those “earmarks” for the politically well-connected were worth in excess of a trillion dollars if they suddenly disappeared.

Unfortunately, those who do not have the political clout to obtain “earmarks” are in competition with those who do, and not just with foreign competitors.