Bloomberg News

Technology Groups Ask Supercommittee to Weigh Tax Overhaul

November 01, 2011

(Updates with president comment in third paragraph.)

Oct. 27 (Bloomberg) -- The congressional supercommittee seeking U.S. budget savings should consider tax-code changes, research investment and airwaves sales as part of a debt- reduction agreement, six technology industry groups said.

The recommendations came in a letter sent today to the bipartisan panel of 12 lawmakers from TechNet, Business Software Alliance, Consumer Electronics Association, Information Technology Industry Council, Silicon Valley Leadership Group and TechAmerica.

“There is a window here because the way this has been structured has been kind of a gun-to-the-head mentality,” Rey Ramsey, president of TechNet, a Washington-based group of executives that promotes technology issues, said on a call with reporters. “We’re holding out some hope that with that pressure, some of the elements in this letter,” will be included in the panel’s recommendations.

The supercommittee, created in August as part of an agreement to raise the U.S. debt limit, has until Nov. 23 to find $1.5 trillion in budget savings in the next decade. The groups submitting today’s letter count as members some of the most well-known names in the technology industry including Apple Inc., Hewlett-Packard Co. and Amazon.com Inc.

Repatriate Earnings

The technology groups said changing the tax code to encourage U.S. businesses to repatriate about $1 trillion in non-U.S. earnings would spur domestic investment and job creation. The organizations also recommended lowering tax rates, simplifying the tax code and creating incentives for research and development.

The groups called for spending cuts aimed at freeing money to support scientific research, improve the nation’s infrastructure and educate the U.S. workforce, according to the letter.

“Not every dollar spent has the same effect on the economy,” they said in the letter. “We recommend reducing or eliminating low-impact spending in order to create the fiscal space to focus on pro-growth investments.”

To raise money for deficit reduction, the groups favored allowing voluntary airwaves auctions that would also free spectrum needed to meet demand for mobile high-speed Internet. Replacing outdated government technology with more efficient systems, such as cloud computing, would also generate savings and improve federal agencies’ productivity, the groups said.

--Editors: Michael Shepard, Steve Walsh

To contact the reporter on this story: Juliann Francis in Washington at jfrancis31@bloomberg.net

To contact the editor responsible for this story: Michael Shepard at mshepard7@bloomberg.net


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