Arlington, Va., March 17, 2005 - The U.S. can be a more competitive country for high-tech companies to do business in if any comprehensive tax code reform measures undertaken by Congress and the Administration incorporate "innovation acceleration" principles, the Electronic Industries Alliance (EIA) asserted today. Those principles include recognition of the valuable contribution of capital investment by business, incentives for research and development, elimination of double taxation, and stability that allows for better long-term business planning. The U.S. would greatly benefit from tax rules that better compete with the systems developed by other innovation nations, which are recruiting more business and high-tech activity through favorable policies.

"EIA supports tax reform that creates more incentives for innovation and a better climate for business competitiveness in the U.S., and we think the tax principles we have crafted can be followed to reach these twin goals," EIA President Dave McCurdy said. "In today's global marketplace, the U.S. can compete more effectively if it treats industry in ways that expand prospects for innovation rather than deter them."

EIA has highlighted business tax reform as one of its top policy priorities for the 109th Congress. The Alliance's Tax & Economic Policy Committee and its Board of Governors recently crafted and approved the following principles, which will be used to measure various proposals expected from Congress and the Administration:

• Tax reform should foster economic growth and enhance the ability of U.S. companies to compete at home and abroad and eliminate cases of double taxation. The system must not incentivize companies to keep as much of their income as possible overseas in more tax-friendly markets. Lowering the effective corporate tax rate would exponentially benefit the U.S. economy.
• The tax code must provide stability and certainty.
• U.S. tax policy should recognize the critical contribution of research and development and provide reasonable incentives to innovate.
• Any reform measure should encourage domestic investment, including foreign direct investment, and recognize the contributions of all U.S. employers.
• Any changes in the tax code should seek to eliminate complexity wherever possible, including, for example, abolishing the Alternative Minimum Tax.
• U.S. tax policy should maximize growth by encouraging capital spending.

A more complete outline of EIA's Tax Principles can be found online at www.eia.org/tax.

About EIA: The Electronic Industries Alliance (EIA) is the leading advocate in Washington, D.C., for the U.S. high-tech industry. The Alliance, which traces its origins to the Radio Manufacturers Association (chartered in 1924), is a partnership of electronic and high-tech associations and companies whose mission is to promote the market development and competitiveness of the $400 billion U.S. high-tech and electronics industries through domestic and international policy efforts. EIA's corporate members - nearly 1,300 - provide products and services ranging from microscopic electronic components to state-of-the-art defense, space and industry high-tech systems, as well as the full range of telecommunications and consumer electronics products. Headquartered in Arlington, Va., the Alliance is made up of the Electronic Components, Assemblies & Materials Association (ECA); the Government Electronics & Information Technology Association (GEIA); the Solid State and Semiconductor Technology Association (JEDEC); the Telecommunications Industry Association (TIA); and leading consumer electronics companies who participate in EIA's Environmental Issues Council. EIA is also heavily involved in cyber security issues through the Internet Security Alliance (ISAlliance), and education issues, through the National Science & Technology Education Partnership (NSTEP).