Where the techno boom that has shaped our lives has also come at a great cost. Silicon Valley’s incredible success in computer-based productivity solutions and global virtual business processes vaporized millions of jobs. Silicon Valley’s innovative products and services created computers, machines and robots taking over millions of Americans’ jobs, with virtually-connected, cheap offshore workers
taking over millions more. Those American jobs may never reappear. Silicon Valley’s CEOs make more money than Wall Street CEOs, and tech companies pay lower taxes, getting many more special tax breaks than Wall Street bankers. Isn’t it time to repeal Silicon Valley’s tax loopholes like research and development tax credits and 100% expensing. And, rein in their transfer pricing abuses, with these companies hiding income in offshore tax havens? How can Apple, Google and others justify parking profits offshore, when Apple pays China under $6 per iPhone (per Chinese officials)? Another point about Section 482 transfer pricing. To beat the tax man, tech companies are forced to hire more employees offshore versus onshore, and to move offices, sales, and property offshore too. It’s sort of like Amazon doing their sales tax game in California. If they don’t have an operation in California, they don’t need to charge sales tax. Bingo, tax hand-outs in Washington are getting Americans fired too. Another tax political hot potato. Most taxpayers making over 1 million per year live in CA, probably near Silicon Valley. In the 1990s, tech companies deducted multi-million dollar W-2s comprised mostly of stock option exercises, still another windfall tax break too. Will a debated millionaire income tax surcharge hit Silicon Valley too? Silicon Valley innovation has been an important element in recent “creative destruction”, something embraced by the Austrian wing of economics (Joseph Schumpeter). Apple, Google and Amazon among others have destroyed millions of American and global jobs too, by breaking established old-economy business models and innovating new e-economy ones in their place. Just ask unemployed people laid-off from the record business (music), print media, publishing, advertising, sales, and retailing. Amazon is destroying state budgets with their sales-tax avoidance schemes too. (from forbes magazine)
