29 Sep A Different Kind of Republican Debate
Last Tuesday, on September 22, five GOP Presidential candidates participated in a forum in Silicon Valley. At our forum, you would not have heard questions such as “Do you think Carly is pretty?” or “Would you trust Donald to have his finger on the button?” or anything else that makes for good reality television and lousy elected officials. Instead, we discussed real issues that are important to Silicon Valley and, for that matter, to the whole country.
RoyseLaw Presidential Candidates Forum was designed to focus on the big three issues: Technology, Tax and Immigration. “The Supreme Court has taken social issues off the table,” I told a reporter shortly before the forum, and that means that Silicon Valleys’ issues are the nation’s issues.
This summer, Secretary Clinton stumbled badly when she took a shot at the “gig” economy, warning that we must protect worker’s rights. She was no doubt talking about Uber when she made those comments and, coincidentally, venture backed Homejoy threw in the towel due to worker classification lawsuits soon after. It took Governor Bush about a nanosecond to respond via a long form LinkedIn blog post. I spoke to Jeb the day that post ran, and (thinking that he had some aide write his blog posts) was quite surprised at how knowledgeable Jeb is about the new economy and what an archaic regulatory environment can do to this entire movement. The battle lines are drawn on the peer to peer economy – on one side is a protectionist approach that props up old, outdated and highly regulated businesses and on the other side is an approach that favors innovation, independence and entrepreneurship at its most grass roots level. This is classic Silicon Valley.
We spoke at our forum about net neutrality (does the regulator always know best?), patent reform and the problem of trolls. Governor George Pataki of New York took the argument beyond my moderated questions and spoke about climate change, science and the role that a technology and science President could play in our country’s future. Even the San Francisco Chronicle noted the alignment between our candidates’ views and startup gospel.
Hardly any topic generates more interest in the business community than taxes. If you happen to be a Fortune 500 company, your tax rate is about 15%, because you have been wisely counseled by someone like me on how to move income offshore. If you are one of my middle market or closely held clients, however, you are subject to the highest rate of tax in the world. High taxes have pushed technology, jobs and revenues offshore and led some to call the last ten years a “lost decade” of economic opportunity. Nonetheless, Senator Bernie Sanders would like to raise the rate and has voted consistently. He recently commented that he has no problem with a 90% marginal income tax rate.
Like the current President, the Democratic candidates have not put much energy into tax reform. Almost every candidate in the GOP field, however, has a tax plan. One candidate, Mark Everson, is the former director of the Internal Revenue Service, and thus can be expected to understand the problem extremely well. Setting aside the details of the various tax plans one question concerns building consensus, reconciling so many competing ideas and actually passing something that is revenue neutral. Senator Rick Santorum reminded us that he had been able to make deals, and has co-sponsored four bills with California’s Democratic senator. The Silicon Valley was built on cooperation, not conflict, and the audience was pleased to hear talk of consensus building on this important issue.
Finally, the audience asked about immigration reform and what could be done to fix a problem that has long vexed the Valley. Shortly before the forum, I asked one of my immigration attorneys what she would change if she were queen for a day, and the result is that there is not enough time in a day to cover all the problems with the system. At a high level, the H1-b system makes no sense at all for reasons that have been widely reported. A startup visa program would legitimize current practices, and would probably resolve a lot of the undocumented worker problems. One candidate even expressed his support for a path to citizenship.
There were other eye openers at our forum. Dr. Ben Carson spoke about generic drugs and described the science behind his surgeries in great technical detail. Senator Rand Paul reminded us that there are significant systemic problems with the way Washington is run. And Governor Pataki established himself as a strong environmental candidate in any party.
When I reached out to invite the GOP field to participate in our forum, I told them that they should come to Silicon Valley because “this is where the best idea wins.” Carly Fiorina challenged me on that statement, noting that the best idea does not always win. On reflection, I think she is correct. Sometimes the best idea is burdened by tax, regulated out of existence or driven offshore by our immigration laws. It is clear that the Presidential candidates at our forum would like government to allow the best ideas to win.