Alexander E. Braun

A Modest Proposal
May 13, 2008

For decades now, there has been a desperate wringing of hands and loud, roaring noises of sadness and despair over the fact that we are losing our technical infrastructure because companies are migrating to other countries, attracted by more genial business climates, mostly due to those nations’ lower labor costs and their governments’ economic breaks, offered to almost any company willing to move its means of production there.

There have been very strong complaints on our side, but very little has been done. Yes, Congress shows deep concern in soundbites appropriate for the evening news, over the technological loss du jour. Those of us with a few decades on us remember the cyclical hullabaloos raised over Japanese cars and “eight-transistor” pocket AM radios swamping the market, the memory wars, and currently the very genuine concerns over IP.

Results? Zip.

I would like to put forth a modest proposal that I believe could solve most of the major problems that seem to concern us, starting with global warming and the fuel problem.

And all of these could be solved without a single extra cent being gouged from the taxpayer, without new laws and regulations (restrictive or otherwise), and without the creation of additional government bureaucracies.

What I propose is simply a straightforward appeal to that most progressive of all human emotions: Greed.



The Taxman and Daniel Webster. (Library of Congress)

In the 1819 Supreme Court case, McCulloch vs. Maryland, Daniel Webster, as attorney for the plaintiff, argued before Chief Justice John Marshall that, “The power to tax is the power to destroy.” While nobody will disagree with the sentiment and verity of such a statement, the fact is that, like the venerable Jedi Master Obi-Wan Kenobi might have phrased it, “There are two sides to taxes, not just a dark side.” We are all well aware of what excessive taxation has done to our businesses and lives. But what is used as a stick can also be used as a carrot.



May the IRS Not Be With You! (20th Century Fox)

IMEC recently announced a record conversion efficiency of 24.7% for GaAs photovoltaics on a germanium substrate. While this is certainly a breakthrough, it is a development that will likely remain in the incubator-like atmosphere of the research lab, awaiting more work and development. But it points the way.

Suppose the United States were to say, “Any company that develops a manufacturable solar cell with 33.3% efficiency will be allowed to do business completely tax free for a decade, as long as all work is done here.” Essentially, the first company to come up with such a development would not pay any federal or state income taxes for ten years. Its employees, while they worked for it, would also not pay those taxes. (There should be no exemptions from county or municipal taxes, because of the services that are funded by them, such as hospitals, schools, police, and fire protection.)

Imagine making the same offer to the first automobile manufacturer that comes up with affordable, completely electric vehicles that have the same performance as their gasoline-powered counterparts: zero to 60 in 6 to 7 seconds, 300 miles between charges.

While this offer might not be directly made to all industries, it would cause a ripple effect, with all sorts of companies vying to get the same deal. The two examples above would certainly have a very salubrious effect on the semiconductor world. Better photovoltaics and more efficient batteries would create business and market opportunities beyond just cleaner automobiles and cheaper electricity.

Companies after this prize would devote greater efforts and resources to the development of leading-edge technologies into products, and once developed, would endeavor to make their manufacture as efficient as possible to sell the biggest volume possible to rake in all those tax-free profits. This would lead to better, cheaper products and highly loyal employees dedicated to their companies’ success.

And all because everyone wants to save a pot of cash by getting that ten-year tax break.

Wonderful stuff, greed…

Posted by Alexander E. Braun on May 13, 2008 | Comments (7)