Technology innovation in the United States will be driven by corporate tax reform and reduced regulation, according to a panel of prominent Republicans at a Republican National Convention event hosted by Bloomberg and Google on Wednesday.
The panel was convened to discuss how government might create policies to encourage investment in high-technology and Internet companies — one of the few areas of growth among startups in recent years, according to a Bloomberg analysis that was briefly presented at the event.
However, as is often the case when talking about technology with backers of GOP presidential nominee Mitt Romney, the conversation kept returning to overall tax and economic policy.
Douglas Holtz-Eakin, president of American Action Forum, called for an end to the taxation of repatriated capital by U.S.-based multinationals and a lowering of the overall tax burdens on U.S. corporations.
“Our companies have the largest effective tax rates on the globe,” said Holtz-Eakin, a senior economic policy adviser to Sen. John McCain, R-Ariz., during his 2008 presidential bid.
Government needs to get out of the “product development” business, said former Commerce Secretary Carlos Gutierrez. Solyndra wasn’t mentioned by name, but the familiar Republican hobbyhorse was lurking in the background as panelists talked about what government should and should not do in terms of research and development.
Gutierrez, who served under President George W. Bush, echoed GOP calls for focusing government efforts on scientific research and away from the kind of late-stage commercialization of products in favored sectors like clean energy. “I worry about the inclination of government to say, ‘Fine, we have to do something, let’s spend $50 billion,’ ” he said.
On the stump, Romney has talked up a plan to attract highly skilled tech workers and entrepreneurs to the U.S. from abroad by offering legal immigration status to students who earn Ph.D degrees in the U.S.
Rep. Peter Roskam, R-Ill., backed the idea, and said that while it was a tough sell politically, “the country is willing to be led” on immigration. The key is to point to these highly skilled immigrants as a source of job creation for the overall economy, and not just in a few isolated sectors, he said.
Roskam predicted that an immigration bill that focused narrowly on highly skilled foreign workers could pass the House. “The obstacle is the Senate,” he said, “whenever they choose to wake up and yawn and look around and take on some of these tasks.”
During a later panel discussion in Tampa that focused more broadly on innovation, Sen. John Hoeven, R-N.D., and GOP political consultant Charlie Black echoed calls for removing regulatory and tax barriers as a way of boosting innovation. But they also noted the importance of Congress and the White House reaching a broad agreement on future spending and tax priorities.
They argued that such an agreement would provide the certainty businesses need to help inject some of the capital they have been withholding into the economy.
“We do need a grand bargain done right … so we can unleash small entrepreneurs,” Hoeven said.
Black predicted that regardless of who wins the presidency in November, the White House and Congress will reach a tax and spending agreement next year, “because there has to be” a deal.
Juliana Gruenwald contributed