SIA dinner chips away at government taxation

The annual Semiconductor Industry Association dinner Thursday night in San Jose, Calif., seemed to focus little on chips, and more on politics.
Indeed, the only “chipping” in evidence was at the current U.S. government, as speaker after speaker stood up and demanded an end to taxation, an end to government meddling, an end to foreign workers doing what should be good ole American jobs. Attendance at the event was mostly industry veterans. Conservative commentator George Will was the keynote speaker.

“Stop taxing America out of achieving excellence” was a much-repeated rallying call of the evening, with Medicare taking the fall for much of the country’s fiscal woes. The automobile industry bailout got slammed too. “Our government can imagine a world without science, but not without Chevys!” boomed one speaker as he took the podium.
It’s worth noting that the SIA recently shifted its headquarters from Silicon Valley to Washington, D.C.,  in order to exert more political pressure to achieve its aims. John Daane, CEO of Altera and outgoing chairman of the SIA, told the audience it was critical Washington be lobbied harder about increasing R&D spending, even in times of crisis, although he never specified where that money should come from.
Daane also railed on the U.S. education system, warning that the U.S. would lose its technology leadership if it didn’t channel more money into the basic sciences – (a good point, but one that simply can’t be achieved without, ehem, taxes.)
The U.S., he said has the second-highest corporate tax rate in the world. And while it may be technically accurate that America has the second-highest corporate tax rate of the Organization of Economic Cooperation and Development, other groups count America as having the fourth-lowest corporate tax revenues among those nations, because of all the special tax favors the government currently doles out to corporations and because many corporations park profits overseas.
Americans should not be relying on their government to help the economy, said one speaker. Government should stay out of corporations’ business.
If the U.S. doesn’t make its tax policies more corporate-friendly, said Daane, it risks losing investments in multibillion-dollar chip factories to other countries, like China. (Intel Corp., for example, is currently building a $1 billion fab facility in Vietnam).
Of course, chip makers have just reported their best year ever. Revenues are at $300 billion, up 32.8% from last year. But the harbingers of doom and gloom are predicting sales to slow down to just 6% growth in 2011 and 3.4% in 2012.
“Stop taxing the so-called rich,” declared George F. Will, the Pulitzer Prize-winning columinist and keynoter, when it was his turn to rally the party faithful at the event. The audience whooped and applauded in approval over their filet mignon.
Immigration was also a hot topic of the night, with several speakers noting how unfair it was that foreign – and better educated – workers were replacing Americans in the workplace. The Environmental Protection Agency also came under fire from the SIA’s new president, Brian Toohey, a former head of the pharmaceutical industry’s lobbying group.
What did the EPA do to invoke Toohey’s wrath? The organization wants new rules monitoring greenhouse gas emissions, which sounds sensible, but would cost the industry millions of dollars in new, cleaner equipment purchases. Toohey believes the EPA is somewhat unrealistic in its demands, and some of the permits it wants would require chip factories to jump through certain hoops that could take them 12 to 18months to complete – an eternity in the semi business.
The U.S. chip industry boasts 185,000 employees, which power a $1.1 trillion electronics industry, which employ an additional 6 million people. We get it. It’s very, very important. And yes, the U.S. should absolutely be investing in its science education, in its R&D programs and in its own citizens’ job opportunities, but none of that is going to happen out of empty government coffers.
The first part of your message is sound, SIA, but capitalism without a social conscience is just not right.