It is important for government to advance programs that help competitiveness. Interestingly, one of the major implicit trade issues is how state tax policy interacts with trade policy. It is important that tax and trade policy go down the same road and in the same direction. From a government policy standpoint, it is important to support measures that facilitate sales in foreign markets, prevent injurious foreign dumping, lower overseas tariffs, and lessen the impact of onerous United States export control laws on our overseas sales. A high-tech company's ability to generate cash flow may be the most important way that it can grow.
Tax policy is one way to generate cash flow.
More can still be done, however. One unsolved issue involves the uncompetitive property tax burden on mega-investments within the state. California is not attracting very many mega-investments today. The manner in which a state provides special incentives or realistic depreciation schedules for plant and equipment may help to alleviate a high property tax burden. Some states grant property tax abatements of up to 10 years on new plants and equipment.