Intel’s Otellini Proposes Tax Credits For Building U.S. Factories

Intel (INTC) CEO Paul Otellini yesterday proposed that the federal government provide tax credits or tax holidays for companies that build new U.S. factories as a way to promote job growth.

Otellini asserted in a talk at the Council on Foreign Relations in New York that it costs $1 billion more to build, equip and operate a semiconductor manufacturing plant in the U.S. than in other countries – and that 90% of the difference reflects tax and incentive policies, and not labor costs.

“So I propose we take a page from others’ playbooks and provide incentives for companies to build factories here that will employ our workers,” he said, according to a transcript of his remarks. “We should offer tax credits or a 5-10 year tax holiday to companies, domestic or foreign, that want to set up or expand a factory in the U.S. This will bring more manufacturing back to the U.S., employ our workers and stimulate out economy…at no cost to us. It’s time to who the world that America is open for business.”

He also proposed that U.S. corporate tax rates be reduced to a level about equal to those of other countries, and Otellini called for the removal of regulations that “needlessly deter investment.”