Blog Post from Pat Cleary
Software and Information: Toward Greater US Competitiveness
March 6, 2008
Written by: Pat Cleary
Since this is a business blog, we'll be writing frequently on issues impacting US competitiveness, like taxes, trade and regulation. In that vein, here's an interesting study from the good people at ContentFirst, done on behalf of the Software and Information Industry Association about the impact of that industry on the US economy and on US competitiveness.
Says the report:
"All sectors of our society and economy are experiencing unprecedented innovation and productivity through the use of software and information. In the United States, IT was responsible for two-thirds of total factor growth in productivity between 1995 and 2002 and virtually all of the growth in labor productivity. Software and Information products and services are at the heart of this growth. The ongoing digital revolution will continue to spur innovation and growth, providing significant new market opportunities for not only the software and information producers but also for their enterprise and individual customers."
Of course, we'd be remiss if we didn't mention that manufacturers are a huge consumer of software and information technology -- maybe the biggest. And it's how they've continued to boost productivity and remain competitive, in the face of some pretty hefty cost burdens coming from Washington in all the areas we mentioned above.
In any event, here's a link to the full study, "Driving the Global Knowledge Economy." Let's hope Washington policy-makers keep their eye on the prize here, the need for US companies to stay competitive in the world economy.
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04/30/2008
Hey Pat - Thanks for the new blog; it seems to be off to a strong start. Great post, it raises some key issues; America leads, because America innovates. The American Dream is not a myth. I truly believe that the American people can compete and thrive in the global economy, as long as we don't defeat ourselves at home. Unfortunately, that is exactly what Washington is doing.
Since 1995, at least 25 European nations (seven in the last year) have cut their corporate tax rates; meanwhile, Washington’s current policies are taxing domestic business growth. America currently has the second-highest tax rate in the industrialized world; among the OECD nations, only Japan has higher taxes than us and they are cutting their rates.
In response to this growing crisis of competitiveness, I introduced legislation to cut the corporate tax rate from 35% to 25%. This rate reduction will unleash America’s powerful economic engine – creating good jobs for middle-class American families. Simply by removing Washington-imposed barriers to prosperity, we can improve the quality of life for every American family.
It’s a move that is long overdue. The last time we cut the corporate tax rate was 1986. After that, America claimed one of the lowest corporate tax rates in the industrial world. The resulting favorable playing field – accentuated by a huge American advantage in education, skills and training - afforded us a tremendous advantage; but that was then, and this is now. A global footrace for capital investment has led countries across the globe to slash their corporate tax rates well below 35 percent. Factoring in state income taxes, American businesses suffer under the weight of an average top corporate rate of 39 percent, according to Congressional Quarterly. It’s no wonder the dollar continues to depreciate in value against emerging-economy currencies.
America’s ability to compete in the global economy will dictate our nation’s prosperity and success. It is time to get Washington working for America again; we must remove the economic shackles binding American job-creators so that our economy can thrive.