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over 100 companies, almost all of them Silicon Valley high-technology companies whose

names you would not recognize. When Congress and the president voted to raise my

personal taxes in 1993, I paid the extra amount by selling some of those Silicon Valley

stocks. That money then went to Washington to be "invested" in "government-

industry partnerships" related to the "electronic data superhighway" (at least that's the way

the public relations people described it at the time).

The point is this: When government raises taxes on wealthy individuals, it is simply

taking investment dollars from those individuals and moving them to Washington. Proven

moneymakers and job creators lose control over the investment of their funds, and

unproven Washington amateurs take over. The real question for Americans is, If you had

to bet the creation of your job on investment by wealthy people in the private sector or on

investment by the government, which would you choose? The answer is obvious. Al-

though it is good stump rhetoric to fume about "tax breaks for the rich," the fact is that

the average American loses out every time a dollar is taxed out of the private sector. If

Congress really wants to enhance the competitiveness of American corporations, it should

cut the capital gains tax and let me invest my own money--I'm very much better at it than

is government.

There is one final hidden cost of government interference in the free market: the

inefficient use of human resources, the most devastating cost of all. All CEOs know one

fundamental truth: the human knowledge and energy collected in a company are what

drive profit. It's not assets, or factories, or cash, but people that separate one company

from another. Consequently, in Silicon Valley, we fight titanic battles to woo employees

in an area where unemployment is less than 2 percent. When Cypress was a start-up

company, we wooed numerous employees from Intel with the lure of a more prominent

position (in a much smaller company) and the potential wealth from stock options. Intel,

now the largest semiconductor manufacturer, has counterattacked with a new campaign

promising--in writing--a Hawaiian vacation as a sign-on bonus for working at Intel.

Recently, when one of our competitors, Cirrus Logic, suffered a problem that prompted

layoffs, we hired an airplane to fly over Cirrus's headquarters carrying a banner with the

message that we had jobs open and our Internet address.

Corporate welfare can have a devastating effect in an environment like Silicon

Valley. While companies are using salary, stock, and promotions to woo the best and the

brightest, the government sometimes uses corporate welfare to prop up sick companies.

Consider this hypothetical case: What if the government had decided to "protect jobs" by

subsidizing carburetor companies when the automobile industry was moving from

mechanical carburetors to electronic fuel injectors? With American fuel injector

companies starving for human talent, and Japanese competitors taking market share, the

government would have been spending money to keep people at the failing carburetor

companies in order to "save jobs." Subsidizing losing companies traps people in dead-end

jobs, prevents other companies from getting the talent they need, and gives our