When President Barack Obama delivers his State of the Union address later Tuesday, the technology sector will be listening for his 2013 agenda and policy plans. Aside from general interest in economic growth and national policies, here are three key items the sector would welcome.
Repatriation of assets on a low-tax or tax-free basis. Most of the major technology companies derive more of their business outside the U.S. than at home. Consequently, they’ve built up huge cash piles abroad.
The best example is Apple Inc. (NASDAQ:AAPL), the most valuable technology company, which reported cash and investments of a record $137.1 billion as of Dec. 31. More than $94 billion of that is offshore, which means repatriating it could incur tax payments as much as 35 percent.
In 2004, the administration of President George W. Bush had Congress approve a tax holiday that brought back nearly $214 billion. Most was used for dividends and share buybacks, not creating new U.S. manufacturing, research and jobs.
With an estimated $1 trillion abroad, a repatriation linked to job creation might be popular, especially because CEOs including Apple’s Tim Cook have said their companies would like to restore some manufacturing that went abroad.
Much of Silicon Valley backed Obama, who easily carried California.
New funds for cybersecurity. Former Defense Secretary Leon Panetta warned in his farewell address that the nation isn’t adequately protected against cyberattackers and threats to its computer system. As well, transportation, electricity and utilities have become major targets.
Obama will likely discuss defense and plans to lower spending in view of plans to end U.S. involvement in Afghanistan. Panetta already approved a major boost in the national cyber command’s manpower and called for better coordination among federal agencies to meet cyber threats.
The Pentagon can partner with Silicon Valley to devise new counterstrategies. It will be interesting to see if the president cites cyberthreats as a future national hazard.
Immigration policy and visa issuance to professionals. Obama is expected to discuss immigration reform in detail, including dealing with resident aliens who came here without visas and their path to citizenship.
The technology community has long fought for greater issuance of H-1B visas that permit foreign nationals to come to the U.S. and work for companies that want their skills. Currently, the number is frozen at only 65,000 annually, although there are exceptions for holders of master's degrees and others.
In fiscal 2011, the number rose to nearly 130,000. If Obama were to announce a new look at the entire issue, it would be music to the ears of TechAmerica, the industry lobby for the technology sector.