First Manufacturing, Now It’s Bye Bye Tech

It’s not fair to single out Apple when it comes to tax avoidance. Every big company uses loopholes and buys fresh ones at the Congressional Campaign gift shop. The New Republic made an interesting connection between all these unpaid taxes and nonstop lobbying for cheaper, indentured H1-B tech workers. This is the same thing manufacturing companies successfully lobbied for in the 80’s. In the short term, they lowered costs. In the long term, they wiped out domestic jobs and hobbled consumer purchasing power for their own products. It’s the business version of self-mutilation. America’s companies are cutters… And there are solutions.

Flooding the tech labor market with cheaper foreign talent might help with short-term staffing, but ultimately it will lower all tech wages. Why invest in domestic education when you can go to India’s 24/7 Brain Mart for a quick fix? Add to that tax gamesmanship and our focus on bombs not brains. It’s a formula for losing tech while it’s still here. Very shortsighted.

Yes, I know all the stats about immigrant business startups. In fact I’m both — an immigrant and a startup founder. And I favor immigration — but not at the expense of long-term competitiveness. The US already welcomes one million immigrants a year — more than any other nation. We should seek to improve quality, not necessarily quantity in such a skewed way.

Finally, the H1-B process is a joke. It exclusively favors giant companies. How? It forces all applications to start submissions in March. They usually run out by June. BUT — employees can’t start work until OCTOBER! What small company can afford that kind of delay? Very few.

So what’s the solution?

There’s no single answer, but here are three places I’d like to start:

  1. Demolish the US tax code. Start from scratch. Have it fit on one page with 10 point font, not 3.8 million words!. That means no loopholes and fewer chances to buy influence.
  2. Real political finance reform (as I wrote in Forbes) – and vote out every incumbent until it’s passed.
  3. A domestic competitiveness strategy. This should be proposed by a small working group of top politicians (current or retired), reps from small and large businesses, and brilliant academics. Lock them in a room, give them enough water and sandwiches for a week; I bet they come up with a good action plan – or starve. This is where a framework of immigration strategy and domestic education should be created — in context — not in backroom bargains.

 

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