Republican Policies Support Tax Breaks For High-Tech

by Leroy Baker, Tax-News.com, New York

07 September 2004

The Republican presidential election policy platform includes support for a moratorium on broadband access taxes and supports making an R&D tax credit permanent, although a House version of a corporate tax bill passed in June by the Republican-controlled House only extends the credit for 18 months.

John Marburger, director of the White House Office of Science and Technology Policy, says that the Bush Administration has largely tried to avoid regulating companies competing in the broadband marketplace, while making wireless spectrum available and extending the moratorium on Internet access taxes. "The administration understands this new (broadband) phase of the information technology revolution," he added.

Some Democrats support tax breaks to encourage broadband. Representative Rick Boucher of Virginia has advocated tax credits for companies that roll out broadband in rural areas.But Democrats have alienated business by focusing on offshore outsourcing as an issue in the presidential campaign. Boucher in June suggested Congress should explore tax penalties for moving jobs overseas. The Republican platform doesn't deal with the issue of outsourcing, but calls for worker training for new jobs to be more readily available.

The Democrats' criticism of offshore outsourcing annoys technology executives: "Our members didn't like the idea that they were being called Benedict Arnold CEOs," said Rick White, president and chief executive officer of the TechNet coalition and a former Republican congressman.

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