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Tech Companies and Immigrant Advocates Press for Broad Changes in Law

February 12, 2013 by Leave a Comment

When it comes to the sweeping overhaul of the nation’s immigration laws that Congress is considering this year, the answer is everything.

Silicon Valley executives, who have long pressed the government to provide more visas for foreign-born math and science brains, are joining forces with an array of immigration groups seeking comprehensive changes in the law. And as momentum builds in Washington for a broad revamping, the tech industry has more hope than ever that it will finally achieve its goal: the expanded access to visas that it says is critical to its own continued growth and that of the economy as a whole.

Signs of the industry’s stepped-up engagement on the issue are visible everywhere. Prominent executives met with President Obama last week. Start-up founders who rarely abandon their computers have flown across the country to meet with lawmakers.

This Tuesday, the Technology CEO Council, an advocacy organization representing companies like Dell, Intel and Motorola, had meetings on Capitol Hill. On Wednesday, Steve Case, a founder of AOL, is scheduled to testify at the first Senate hearing this year on immigration legislation, alongside the head of the deportation agents’ union and the leader of a Latino civil rights group.

“The odds of high-skilled passing without comprehensive is close to zero, and the odds of comprehensive passing without high-skilled passing is close to zero,” said Robert D. Atkinson, president of the Information Technology and Innovation Foundation, a nonpartisan research group based in Washington.

The push comes as a clutch of powerful Senate Republicans and Democrats have reached a long-elusive agreement on some basic principles of a “comprehensive” revamping of immigration law. Separately, a bipartisan bill introduced in the Senate in late January focuses directly on the visa issue.

The industry’s argument for more so-called high-skilled visas has already persuaded the president.

“Real reform means fixing the legal immigration system to cut waiting periods, reduce bureaucracy, and attract the highly-skilled entrepreneurs and engineers that will help create jobs and grow our economy,” Mr. Obama said in Tuesday’s State of the Union speech.

In a speech in Las Vegas in January in which he introduced his own blueprint for overhauling immigration law, Mr. Obama embraced the idea that granting more visas was essential to maintaining innovation and job growth. He talked about foreigners studying at American universities, figuring out how to turn their ideas into businesses.

In part, the new alliance between the tech industry and immigration groups was born out of the 2012 elections and the rising influence of Hispanic voters.

“The world has changed since the election,” said Peter J. Muller, director of government relations at Intel, pointing out that the defeat of many Republican candidates had led to a softening of the party’s position on broad changes to immigration law. “There is a focus on comprehensive. We’re thrilled by it.”

“At this point,” he added, “our best hope for immigration reform lies with comprehensive reform.”

Mr. Case, the AOL co-founder, who now runs an investment fund, echoed that sentiment after meeting with the president last Tuesday.

“I look forward to doing whatever I can to help pass comprehensive immigration reform in the months ahead,” he said, “and ensure it includes strong provisions regarding high-skilled immigration, so we are positioned to win the global battle for talent.”

That sort of sentiment delights immigrants’ rights advocates who have banged their heads against the wall for years to rally a majority of Congress around their agenda.

“The stars are aligning here,” said Ali Noorani, executive director of the National Immigration Forum. “You’ve got the politics of immigration reform changing. You’ve got tech leaders leaning in not just for high-skilled but for broader immigration reform.”

Senator Orrin G. Hatch, Republican of Utah, who is co-sponsoring the bill to increase the number of visas available for highly skilled immigrants, said the cooperation went both ways.

“All the talk about the STEM field — science, technology, engineering, mathematics — has awakened even those who aren’t all that interested in the high-tech world,” he said.

While the growing momentum has surprised many in Washington, comprehensive change is still not a sure thing, especially in the Republican-controlled House.

Mr. Hatch said he would push forward with his measure even if the broader efforts foundered. But his Democratic co-sponsor, Amy Klobuchar of Minnesota, said she would press for the bill to be part of the comprehensive package.

Last year, technology executives had a taste of what could happen with stand-alone legislation.

Julia Preston contributed reporting from New York.

Article source: http://www.nytimes.com/2013/02/13/business/tech-companies-and-immigrant-advocates-join-forces.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Social Security Payroll Tax Hike Drives Wedge in Washington

December 1, 2011 by Leave a Comment

A small number of Republican lawmakers indicated that they would be open to the idea of raising additional revenues to offset the cost of extending the payroll tax cut, a break in what has been the party’s nearly solid ranks against tax increases.

Senate Republican leaders introduced a bill that would keep the payroll tax rate at its current level for another year. The cost is roughly $120 billion. Senate Republicans would offset most of the cost by freezing the pay of federal employees through 2015 and gradually reducing the federal work force by 10 percent.

In addition, Senate Republican leaders would go after “millionaires and billionaires,” not by raising their taxes but by making them ineligible for unemployment compensation and food stamps and increasing their Medicare premiums. Democrats said that this part of the Republican proposal was not serious, pointing out that high earners were already ineligible to receive food stamps.

The Congressional Budget Office said the Republican bill would reduce federal deficits by $111 billion, mainly because of the pay freeze and the reduction in the federal work force. Senate Democratic leaders want a deeper temporary reduction in Social Security payroll taxes. They would provide payroll tax relief to employers as well as employees. And they would offset the cost with a 3.25 percent surtax on modified adjusted gross income in excess of $1 million.

President Obama, at a campaign-style rally in Scranton, Pa., said Wednesday that if Congress failed to extend the payroll tax cut, it would be “a massive blow for the economy, because we’re not fully out of the recession yet.”

Mr. Obama said Americans should send a message to Congress: “Don’t be a Grinch. Don’t vote to raise taxes on working Americans during the holidays. Make sure to renew unemployment insurance during the holidays.” The Senate is expected to reject the Democratic proposal in the next few days, opening the door to further negotiations with Republicans next week.

Adam Jentleson, a spokesman for the Senate majority leader, Harry Reid, Democrat of Nevada, said: “We are glad Republicans have seen the light and taken up Democrats’ call to pass a middle-class tax cut, just a few days after their leadership indicated they would oppose it. However, Democrats’ proposal would put more money in the pockets of middle-class families and create more jobs.” He said Democrats would work with Republicans “to negotiate a consensus solution.”

Last December, Congress temporarily reduced the employee’s share of the Social Security payroll tax by 2 percentage points, to 4.2 percent of wages. If Congress does nothing, the rate will revert to 6.2 percent in January.

Mr. Obama, Democratic lawmakers and many economists say such a tax increase would take money out of workers’ pockets, depressing consumer demand for goods and services and setting back the fragile economic recovery. Speaker John A. Boehner said Wednesday that he was “interested in working with the president to find common ground” on the payroll tax cut. He said the tax break must be paid for, but not with a surtax on high income.

Mr. Boehner referred to the surtax as a “job-crushing tax hike on small businesses” because some small-business owners report business income on their personal tax returns.

Interviews with rank-and-file House Republicans found ambivalence about the idea of extending the payroll tax cut.

“A payroll tax is a dedicated tax for Social Security,” said Representative Jeff Flake, Republican of Arizona, who voted against a tax package last year that included the payroll tax cut. “Unless we are willing to have a commensurate change in benefits, then we shouldn’t do it. It certainly isn’t a supply-side or simulative tax cut. I’m for ending it.”

Representative James Lankford, Republican of Oklahoma, said that he was open to extending the cut, but had deep concerns and would need convincing. “I want to be very careful,” he said. “If this is going to be a long-term rate, let’s set it and resolve long-term issues of Social Security. I am opposed to saying times are tough, let’s make it more tough for my kids.”

The Senate Republican leader, Mitch McConnell of Kentucky, said, “Republicans will put aside their misgivings and support extension” of the payroll tax if “it will give some relief to workers” still struggling in a bad economy.

Senator Mike Johanns, Republican of Nebraska, said Wednesday that he was willing at least to consider a tax increase on high earners as part of a comprehensive deficit reduction package.

“I sense a change in mood,” Mr. Johanns said. “It’s a little more bipartisan. My position has always been, ‘Let’s not raise taxes,’ but on the other hand I don’t want our country to collapse under a mountain of debt. If that means compromise, I am going to do everything to get that done.’ ” Senator Susan Collins, Republican of Maine, said that she had formulated a plan to pay for extension of the payroll tax cut with a tax increase on high earners that carved out employers, so they would not be hit with higher rates.

Article source: http://feeds.nytimes.com/click.phdo?i=5507dda36319714ad24937476fbe4773

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State Weighs Tax Change for Giant Financial Firm

March 26, 2011 by Leave a Comment

Even for the world’s largest asset manager, every million counts.

Among the thousands of provisions up for inclusion in the budget deal being crafted this weekend by the Legislature and Gov. Andrew M. Cuomo are a few dozen words that could save BlackRock, the New York-based financial firm, millions of dollars in city taxes in the future.

The provision was proposed by Senate Republicans last week as an amendment to an otherwise routine extension of state tax law. It would allow BlackRock, which earned a record profit of more than $2 billion last year, to be taxed by the state as a general business corporation rather than as a bank, saving it at least $3.5 million — and possibly several times that much — in city taxes each year.

A spokeswoman for BlackRock declined to comment. Scott Reif, a spokesman for the Senate Republicans, said the amendment was intended to correct a running flaw in the state’s tax code that for years has effectively stranded BlackRock, one of the world’s largest financial companies, in the wrong section of the code.

“Our budget proposes a technical fix that will allow companies to avoid the unintended negative consequences of an otherwise good and necessary provision,” Mr. Reif said. Aides to Mr. Cuomo and the Assembly speaker, Sheldon Silver, said the matter was still under negotiation. It is unclear how many other companies it could affect, and thus how much tax revenue might be gained or lost as a result of the change.

The Senate push represents merely the latest wrinkle in a five-year saga for BlackRock. The firm was once wholly owned by PNC Bank, but is now a stand-alone asset-management business partly owned by PNC and other companies.

Normally, that would make BlackRock subject to New York’s corporate franchise tax. Under a quirk in New York law, BlackRock continued to be treated as a bank for tax purposes, potentially subjecting it to a higher rate.

Last year, State Senator Liz Krueger and Assemblyman Jonathan Bing, both Manhattan Democrats, introduced legislation that would have allowed BlackRock to switch tax categories. The bill did not advance in the Senate, Ms. Krueger said, in part because she could never get the company’s lobbyists to explain how much they would save, or what steps they would take to offset any lost revenue to the city and state. “They were always vague about how much it would save them or what jobs they would bring” from offices elsewhere, she said.

When the bill stalled, BlackRock turned to the State Department of Taxation and Finance. Last year, officials there cut the firm’s state tax bill through an administrative ruling on the tax code, saving BlackRock an unknown amount in state taxes. (BlackRock would not say how much it had saved, and state officials are not permitted to say.)

But urgency remains: Unless the change is enshrined in state law, officials said, BlackRock cannot take advantage of certain corporate tax cuts passed by New York City in recent years. One official, speaking on condition of anonymity, because he was not authorized to discuss the negotiations, said the city could expect to lose about $3.5 million in revenue next year, and several times that amount in the future.

BlackRock reported paying $971 million in local, state, federal and foreign taxes last year and calculated its effective tax rate at 33 percent.

According to BlackRock’s corporate filings with the Securities and Exchange Commission in 2009 and 2010, both the United Kingdom and New York City enacted legislation reducing corporate income taxes, which resulted in a combined tax saving of $75 million. The firm also reported, in 2009, $25 million in tax benefits primarily related to “a favorable tax ruling and the final resolution of outstanding tax matters,” though it was unclear where.

“Corporations want to minimize their tax bills,” Ms. Krueger said. “And BlackRock seems to be exceptionally aggressive in trying to do that.”


Article source: http://feeds.nytimes.com/click.phdo?i=3e2fa6f20090274300816ec843726b75

Filed Under: Business News Tagged With: , ,