Technology’s rapid innovation cycles force internet users to constantly upgrade their IT systems. Could this constant battle against technological obsolescence be so pervasive as to include even our internet metaphors?
Google has announced plans to store their supercomputers that power the internet on barges up to seven miles offshore. Ahoy! The information superhighway has set sail.
As The Times explains, “The “water-based data centres” would use wave energy to power and cool their computers, reducing Google’s costs. Their offshore status would also mean the company would no longer have to pay property taxes on its data centres, which are sited across the world, including in Britain.”
Obviously, these sea-based storage systems remain in the theoretical stage. There remain big, unsolved issues like how to keep the barges safe from hurricanes and terrorists. However, the mere possibility of offshore data-barges underscores the importance of public policymakers staying technologically up-to-date.
California must constantly upgrade our laws, especially tax laws, to keep pace with these new developments. It’s true that the internet has reduced some traditional sources of tax revenue while increasing other tax revenue. The California Legislative Analyst’s Office estimates that since 1981 California’s sales tax base has declined by 10 percent. At the same time, capital gains taxes from hi-tech company stock sales helped close deficits in the early 2000’s.
New iTaxes and interpretations of state-business nexus may seem like great short-term solutions to boost revenue. (California recently considered both ideas in the past legislative session.) Legislators need to remember that no industry or region is protected from the free-market’s invisible hand. If California exacts too many regulatory and tax demands on hi-tech businesses, they might just pack their bags and set sail. Likely? No, but ask the steel workers in Pennsylvania and GM employees in Michigan whether the Silicon Valley could someday become the Silicon Sea.