Questions I would have asked President Obama and Intel CEO Paul Otellini

Chuck Sheketoff

If I had been present at today's meeting between President Obama and Intel CEO Paul Otellini, this is what I would have asked:

Question 1 for President Obama.

One of the greatest threats to education here in Oregon and all but a few states is the lack of revenues resulting from the Great Recession and the somewhat anemic recovery. Don’t profitable corporations like Intel have an obligation to start paying more in state corporate income taxes to fund the education system that they need and desire?

Question 2 for President Obama.

The company that your are touting today, Intel, has been very successful at playing states off against each other in bidding wars for tax cuts, and that has negatively affected the ability of Oregon and other states (notably New Mexico and Arizona) to fund education adequately. What should the federal government do to reign-in the interstate tax competition that has states bidding in a race to the bottom on funding for the education system you are advocating?

Questions to Intel CEO Paul Otellini (in front of the President):

Question 1 for Paul Otellini.

In 1997, Intel founder and then-CEO Andy Grove was featured in a full page ad in the New York Times thanking the City College of New York for giving him a scholarship and a great education when he arrived penniless from Hungary (PDF). To some, that ad speaks volumes about the role of public education in innovation in this country and in making Intel what it is today. If public education has been so important to Intel, why does Intel aggressively lobby to get out of paying taxes that support public education in the states where you operate?

Question 2 for Intel CEO Paul Otellini.

You often boast about your tax deductible contributions to science and math education, but you’ve also been successful in demanding tax cuts in the states and communities where you have production and research facilities. How do you justify stripping states and communities of the revenue they need for funding the education goals of the President?

Unfortunately, I wasn't invited to the event to get the opportunity to ask the questions. And I'm not holding my breath for a response from Intel, though they certainly could do so here on BlueOregon.

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    I'm glad you posted this, Chuck. Let me give you my two-bits about "obligations.”

    Businesses are creations of the Rule Of Law, which guarantees those going into business that they will be held to their contractual obligations and visa versa. There is NO expectation of additional subjective, moral, ethical, or parochial obligations – and there shouldn’t be! However, the money from business does go to people… Place your obligations where they belong – on people.

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    Am I correct in my understanding that Intel pays the corp min income tax due to the manner in which the state calculates revenue.

    Does Intel pay property taxes in the counties they are located or have they rec'd exemptions(credits) that negate that as well?

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      Since passage of single sales factor apportionment, OCPP has said we suspect that Intel pays the corporate minimum. In April 2006 Betsy Hammond reported in The Oregonian " Intel --Oregon's largest employer and a company that paid $50 million a year in Oregon corporate taxes a few years ago --will see its 2006 tax bill fall to a fraction of that amount, potentially as low as $10."

      In a 1998 ECONorthwest report on Intel ECO noted "In 1997, Intel paid $54 million in corporate income tax to the State of Oregon, the largest amount of any corporate taxpayer and 14% of all corporate income tax receipts in that year." Around that time Intel was using this number in news stories and was allowing state officials to use it too, and to confirm they were Oregon's number one taxpayer.

      Then in 2003 ECO did another report on Intel and wrote "Intel’s Oregon corporate income taxes averaged $50.9 million per year over 1998 to 2001." I contacted both ECO and Intel and they would not release individual year figures. Single sales factor apportionment dramatically cut their taxes...probably to the minimum as Hammond of The Oregonian concluded.

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    This is why I really enjoy BO. Here we have an article questioning the end results of a company doing whatever it can to be the #1 company in the world and contrast that with the article "Are Oregon Business Execs too nice?"

    Can we have a company that shows that killer drive and still keep the locals happy? That might make for an interesting discussion.

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    "Question 1 for Paul Otellini."

    That should bring a nervous lump to someone's throat.

open discussion

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