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Weekly Column: What the Economy Needs Right Now

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By:
Date:
Location: Washington, DC

Wrapped in rhetoric, the president and congressional leaders are bringing ideas to the discussion about how to get our economy moving. Some are thoughtful ideas, some are old ideas disguised as new ones, some are workable and some are not. At least the focus is now where it should be: on jobs.

First, tax cuts are on the table. This discussion used to be simpler; taxes could go up or come down. Now, even the simplest part of the U.S. tax code is subject to expirations and phased-out deductions and one-time credits. If you are in the ten percent income tax bracket, that bracket is set to expire in 2013 -- as in disappear. And the disappearance of the 10 percent bracket will also increase the tax liability of everyone who pays taxes, all the way up through the middle class and above.

Without certainty, American families don't know how much will be in their paychecks from week to week and year to year, even if their overall pay stays the same. It becomes impossible to budget with confidence for long-term expenses: the purchase of a home, starting a family, buying a car or taking an annual vacation. No one has measured the cost of this uncertainty on our national economy, but someone should. This is a significant factor in the daily economic decisions of millions of people.

And it is not just the tax code for working Americans we need to sort out -- the tax code for our employers needs attention, too. We and our economy need a simpler tax system, one which is flatter and easier to understand. We also need a system which reflects our priorities: strong families making their own decisions, incentives for job creation by American businesses old and new, as well as international companies thinking about locating here in the U.S.

The corporate tax rate in America is 34 percent, more than any other developed country in the world. Yet no one really seems to pay that rate. The Walt Disney Company pays a reported 39 percent in taxes and General Electric pays next to nothing. It's unfair to say the least.

The corporate tax rate should be refigured. If our tax on businesses is more competitive with the rest of the world, then our businesses will be more competitive with the rest of the world. As we bring new opportunities to America, we will also bring more jobs to our shores, particularly in the manufacturing sector. Manufacturing begets innovation in other fields, too, like energy, technology, and the sciences. By some assessments, allowing U.S. companies to bring their revenues back to the U.S. without penalty would bring three million jobs to our shores. If we could link the return of all this American business to incentives for job creation, why wouldn't we?

And, finally, when we choose priorities for the federal revenues that make up our national budget, we should bear three simple goals in mind. One, minimize the cost of servicing our national debt by keeping our borrowing to an absolute minimum, always paying off more than we owe. Two, eliminate counterproductive federal expenditures on nonsensical regulations that hinder economic growth and hurt families. Three, use the savings in our annual budget to invest in transportation and economic infrastructure -- a nationwide need which has been sorely neglected in the first three years of the Obama Administration.

And if it sounds like people in Washington are humming a new tune, we have to make them sing the whole darn song. Only then will we get the commonsense reforms required to get our economy moving.


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