There’s something that everyone agrees on when it comes to getting the U.S. economy back to full competitive strength: we need modern, comprehensive tax reform. Republicans, Democrats, working families, business leaders -- the broad range of the American public -- understand that our current tax system doesn’t help job creation. What’s in place now, an outdated corporate tax code last reformed in 1986, is a generation out of step with the economic realities of today’s hypercompetitive global marketplace. It’s a message that Washington is taking on the road.
Whether it is President Obama’s speech today in Chattanooga, Tenn., or Senate Finance Committee Chairman Max Baucus’ and House Ways & Means Committee Chairman Dave Camp’s recent “road show” stops (the most recent one was in Philadelphia earlier this week), the bipartisan dialogue is centering on how to shape a modern tax system that catalyzes job creation.
We applaud bipartisan discussion, but would welcome congressional action even more. With the potential for the tax-writing committees to put pen to paper when Congress returns in September, it’s important to reinforce the core components that are central to pro-growth, job-creating tax reform:
- Make the tax code competitive with China, the United Kingdom, and elsewhere across the globe by lowering the current U.S. corporate tax rate -- right now, easily the world’s highest. In fact, cutting the rate by 10 percent (bringing it in line with our major economic competitors) would create 581,000 new jobs in each of the next ten years;
- Bring jobs and investments home by adopting a competitive, market-based approach that clears obstacles U.S. companies face today when they want to bring foreign earnings back to our shores. The current antiquated tax code already has locked out an estimated $1.7 trillion from U.S. investment. A market-based system would provide an incentive for U.S. companies to invest their foreign earnings to support and expand their American operations and create new jobs here at home; and,
- Bolster America’s leadership in R&D by backing inventors and scientists with a robust and improved R&D tax credit, which would boost U.S. gross domestic product by $66 billion every year.
We welcome the president’s engagement on tax reform, and the continued bipartisan dialogues in the House and Senate on actual reform legislation. Now is the time to move from the spoken to the written word, and work together to shape a modern tax system that boosts job creation and economic opportunity across the country.