Three minutes with Larry Letow on the tech tax and surviving the economy

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Local,Karl B. Hille

In the 2008 recession, Larry Letow's company, Convergence Technology Consulting posted its most profitable year yet, recording $15 million in revenue. That, and his efforts to overturn the controversial technology sales tax on computer services won Letow Corridor Inc. Magazine's 2008 Person of the Year Award.
At the ceremony Thursday night, Letow talked to The Examiner about that fight and the bigger ongoing fight against the recession.


You have said you weren't alone in fighting the tech tax. How did this play out?
You sort of created a war-room mentality. All of a sudden when you get into a fight like this, packs of people form up and every gang has their own leader. Our gang was the Tech Council of Maryland, but there were so many other tech councils and chambers in the fight.  It's an award given to one, but won by many. I was just the poster child.


Was it worth it?
We sort of traded a headache for a stomachache. It was a tradeoff for the progressive tax. In the long run, it made the industry stronger. Senators and delegates know how fast we reacted.


Was this one of those ideas that looked good on paper?
The bottom line was they had two choices. They either get the money from one entity or you spread it across many.
They decided it would be easier just to aggravate one constituency – Biotech and technology. I don't know if you have any other industry they could get $300 million a year out of.


How did the word get out and how hot did the reaction get?
Each council was shooting the information out. Right up until the day they did this, they told us it wasn't going to happen.
Senators, legislators were telling us 'You don't have to worry about it.'
We were caught with our pants down.
They resisted repealing it too. The Governor said 'We're not repealing this thing.'


How did they resolve it?
Finally they were almost pointing to the solution they wanted us to back. It was either the tech tax or the progressive [income] tax. Ultimately they increased the tax percentage a small amount for people making more money. 
The problem is if you're incredibly wealthy you got hit with a big tax.


What's the trade-off?
If this [tech] tax went through it was going to cause people with less money to be laid off.  Unfortunately, now with this economy that's started to happen anyway.


What keeps your company running in this economy?
We just have the best team ever. Our CEO is a technical genius, our chief of sales is incredible, our engineer is a genius. You work your ass off and you keep going. Fortunately for us, so far, the economy hasn't hit technology too hard. People are not going to cut the infrastructure their company is running on.
We're surviving. We increased our staff 10 percent in January.


Now that you and your collective industry counterparts have flexed your political muscle, what next?
Education. We are a knowledge-based society. Higher Education drives our work force, and we need to put more money into it.
karl,hille,science, Larry Letow, technology, convergence technology consulting, tech council of Maryland, tech tax,

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