CompTIA: Fiscal Cliff Will Cause ‘Major Trauma’ to IT Sector
CompTIA says the fiscal cliff will severely cripple IT integrators by reducing the small business expense threshold, the R&D tax credit and access to education and government contracts.
Small- and medium-sized information technology (IT) businesses will experience major trauma if Congress fails to address the fiscal cliff, according to a new CompTIA white paper.
The “Impact of the Fiscal Cliff on SMB IT Companies,” which focuses on the $955 billion domestic IT sector, warns that mandatory spending cuts will harm small and medium IT businesses, as well as the economy as a whole. The paper also points out specific business expensing and tax credit provisions that will harm small IT firms, as well how cuts in government programs will impact the sector.
“As Congress returns to wrap up unfinished business, I urge them to consider the impact of tax and federal policies on the domestic IT sector, which employs more than two million workers and contributes $110 billion to workers’ payrolls,” says Todd Thibodeaux, president and CEO, CompTIA. “An approach that balances revenue increases with spending cuts while prioritizing policies and programs that spur innovation and entrepreneurship can right the ship and sets us on a steady economic course.”
A recent CompTIA survey of IT and business executives found that approximately two-thirds (65 percent) support a degree of balance in addressing the fiscal cliff. Twenty-six percent feel Congress should implement spending cuts and revenue increases equally, while 23 percent favor slightly greater spending cuts and 16 percent support slightly greater revenue increases.
http://www.cepro.com="">R&D: The research and experimentation tax credit, which incentivizes developing or improving new products and technologies, must be renewed.
http://www.cepro.com="">Government Purchasing: The U.S. government is a major purchaser of IT services, through the Department of Defense and other agencies. Government spending also drives adoption of IT services and innovation in this area by leading the private sector on cybersecurity, cloud and other emerging technologies. Sharp decreases in government investment in basic and applied research threaten to have a trickle-down effect on the technology sector as a whole.
http://www.cepro.com="">Access to Education: Programs that expand life-long learning in computer sciences and basic IT skills will be jeopardized by sequestration. The Department of Education, the Trade Adjustment Assistance Community College and Career Training Grant and Department of Labor’s Veterans Employment and Training are among the agencies and programs that would be impacted. These programs are particularly important to the IT sector as companies of all sizes report a skills gap in the workforce. Moreover, there are currently 280,000 open IT-related jobs, which could be filled through training and certification programs.
<a data-cke-saved-href="/images/pdfs/ImpactFiscalCliffFinal.pdf" href="/images/pdfs/ImpactFiscalCliffFinal.pdf" target="_blank" title="<img data-cke-saved-src="https://www.cepro.com/images/uploads/fiscalcliffwhitpaper.jpg" src="https://www.cepro.com/images/uploads/fiscalcliffwhitpaper.jpg" border="0" alt="image" data-cke-saved-name="image" name="image" width="300" height="217" /><img data-cke-saved-src=" http:="" http://www.cepro.com="" images="" uploads="" fiscalcliffwhitpaper.jpg"="" src="https://www.cepro.com/images/uploads/fiscalcliffwhitpaper.jpg" border="0" alt="image" data-cke-saved-name="image" name="image" width="300" height="217">“As President Obama works to strengthen the economy, it is critical that he supports the efforts of small businesses to grow and innovate,” adds Thibodeaux. “It is equally important that his administration act to help displaced and unemployed workers who, with training and assistance, can find meaningful careers in IT, and contribute to U.S. innovation and global leadership.”
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Jason Knott is Chief Content Officer for Emerald Expositions Connected Brands. Jason has covered low-voltage electronics as an editor since 1990, serving as editor and publisher of Security Sales & Integration. He joined CE Pro in 2000 and serves as Editor-in-Chief of that brand. He served as chairman of the Security Industry Association’s Education Committee from 2000-2004 and sat on the board of that association from 1998-2002. He is also a former board member of the Alarm Industry Research and Educational Foundation. He has been a member of the CEDIA Business Working Group since 2010. Jason graduated from the University of Southern California. Have a suggestion or a topic you want to read more about? Email Jason at firstname.lastname@example.org
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