When it comes to growing our economy and making Washington, D.C., interfere less in our lives and the lives of entrepreneurs and business leaders, the obvious first step is reforming our tax code. Senator Rob Portman wrote an op-ed on this very topic this morning and hits the nail on the head:
There is a broad and growing consensus that our tax system is plagued by excessively high rates on business and labor income, a complex maze of tax preferences, and an outdated approach to American businesses competing for customers abroad.
The solution, as Sen. Portman highlights, is commonsense. Lower tax rates. Pay for it by getting rid of preferences, loopholes, crony capitalism and handouts. And Make the code flatter and fairer. This will help spur economic growth.
Today, three years into the weakest recovery on record, the American economy is still sputtering. Twenty million people are jobless or underemployed, and fewer jobs were created last year than the year before. Median family income is at its lowest level since 1995.
Taking a larger tax slice out of a shrinking economic pie is not the way to spur job creation or erase the government’s trillion-dollar deficits. The solution is to grow the pie — to unleash the forces of economic growth and job creation. And there is no better way to do that than through structural spending reforms to boost confidence in America’s long-term fiscal solvency, paired with reform of our tax code to promote growth, investment, and entrepreneurship.
While nearly every other developed nation has decreased the complexity of their codes and reduced their marginal tax rates, the U.S. rate has remained stagnant while becoming more complex and as a result, fallen far behind. Our excessive spending and ridiculous tax code has put American workers, small businesses, and job creators at a disadvantage. Sen. Portman explains:
Excessive tax rates on business income decrease the incentive to build and invest in the United States and put American workers at a competitive disadvantage. As the Organization for Economic Development and Cooperation has reported, high corporate tax burdens are “most harmful to growth.” Yet as our major trading partners have slashed their rates to attract jobs, the U.S. corporate rate last year became the highest among our 33 major industrialized competitors. One study in the Journal of Public Economics showed that a 10-point rate cut could increase economic growth by 1-2 percentage points — which translates to about a million new jobs per year.
Take the time to inform your Member of Congress. Read the entire article and share it with people who may be interested.