Why are domestic policies, both here and abroad, threatening to tear apart the most globally competitive companies? Rather, we should be doing all we can to encourage their success, especially now.
The European Union has been on a tear, swinging a wrecking ball at U.S. globally competitive companies. Just last week the EU fined Intel a record-shattering $1.45 billion for “anticompetitive practices”—the largest fine ever imposed for any breach of EU antitrust law. The previous record-smashing fine was $677 million, imposed on Microsoft in 2004.
Which U.S. companies are next? Could it be:
- IBM facing a new complaint after settling a decades-old case?
- How about Rambus or Qualcomm, which are under an ongoing inquiry?
- Or perhaps Cisco, now being questioned by the EU regulators?
- Or maybe even Google, which has attracted the eye of the EU antitrust crowd?
The same threats currently loom at home. The Department of Justice announced a new era of scrutiny for our most successful businesses. And like the recent EU case, the actual evidence that consumers were harmed may not be required.
And Congress, at the urging of the White House, now wants to contort the tax code even more by hiking taxes on our most innovative global companies, making them less competitive, by fundamentally rewriting the 100-year-old rules of international taxation.
Unlike most countries, the United States taxes the worldwide earnings of U.S.-based companies, not just their U.S. earnings. But a series of complex tax rules has enabled American companies to pay about the same rate on their foreign earnings that their foreign competitors pay, hence allowing our companies to fairly compete in the marketplace. But with the proposed changes, the U.S. government will tilt the field against U.S. industry.
If you think that having a job is important and that economic growth is a good thing, then you should be concerned at recent developments, both here and abroad. We need more free trade, but there’s one thing we don’t need to import: The antitrust policies of the EU, or export our tax policies that harm the country’s most innovative industries.