Silicon Valley Looks To New Congress For Corporate-Friendly Tax Changes
SAN JOSE (KCBS) – With the new Republican majority in the House seated Wednesday, Silicon Valley looks to Washington for a more corporate-friendly tax policy, especially when it comes to taxes on overseas profits.
Silicon Valley CEOs maintain such taxes are the biggest detriment to creating thousands of jobs in the U.S.
KCBS' Mike Colgan Reports:
Michael Klayko, CEO of San Jose-based Brocade Communications, which has 2,600 employees in the Bay Area, and 2,000 more overseas, said that what is needed is a tax repatriation on income earned abroad.
"Right now, as we sell products offshore, that money sits where we have sold the product, whether it be Europe, or Asia or so forth," said Klayko. "To bring that money back to the U.S. would cost 35 percent. I, as a CEO, can't find an investment that I could make that returns 35 percent, so it just sits there and earns interest and so-forth, and I invested in that local economy. We would like to bring that money back, but at a much lower tax rate."
John Shoven, Director of the Stanford Institute for Economic Policy Research said it's an issue that Congress and the Obama Administration need to address.
"We should be welcoming companies who want to bring that money into the U.S.," said Shoven, claiming that one to two trillion dollars are sitting overseas.
Critics, however, maintain a policy change would amount to a tax break.
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