8 Tech Firms Urge Tax Breaks

Intel Corp., Hewlett-Packard Co. and six other digital technology companies Wednesday urged the Bush administration to reduce taxes and improve schools so the industry can beat low-cost competitors from India and China.

In a paper, the chief executives from the eight companies said the way to keep technology jobs in the U.S. was to improve the competitiveness of the U.S. industry, not to prevent companies from going abroad.

“Retreating from global competition is a certain prescription for failure,” the paper said.

In the next decade, as many as 6 million positions held by U.S. workers may be sent to India, Ireland, Israel and other nations by companies in search of a low-cost, tech-savvy workforce, Goldman Sachs Group Inc. said in a September report.

Democratic state Rep. Zack Hudgins of Washington, the home of Microsoft Corp., has proposed blocking the award of government contracts to foreign companies.

The executives say the U.S. benefits from foreign employment. About 60% of the revenue of U.S. information technology companies comes from abroad. That money helped finance $56.5 billion of spending on research and development in 2002.

The technology business group, called the Computer Systems Policy Project, said the federal government should make permanent a tax break for research and development costs, put a moratorium on taxes on the Internet, and cut taxes on corporate income earned overseas, the group said.

In addition to Carly Fiorina of Palo Alto-based Hewlett-Packard and Craig R. Barrett of Santa Clara, Calif.-based Intel, the group is composed of Michael S. Dell of Dell Inc.; Joseph M. Tucci of EMC Corp.; Samuel J. Palmisano of IBM Corp.; Edward J. Zander of Motorola Inc.; Mark V. Hurd of NCR Corp.; and Lawrence A. Weinbach of Unisys Corp.