Suggestions to get the economy cranking
From the pages of In Business magazine.
It’s an election year, so the following recommendations probably have a snowball’s chance in July, but each of them would help get us off this underwhelming 2-2.5% economic growth pattern. Let me start by noting the Federal Reserve’s tapering program is already linked to increased small business borrowing, so that alone appears to be boosting growth, but we shouldn’t stop there.
Pass comprehensive immigration reform: The economic growth we’re leaving on the table by not addressing the problems associated with a broken immigration system is one of many reasons congressional approval is tanking. From caps on hiring people with the skills that businesses need, to the lack of a guest worker program to help farmers find the labor they need, it’s a situation that cries out for help. Business and labor have come together to support the immigration reform bill that passed the U.S. Senate. If they can resolve their differences, why can’t Republicans and Democrats?
Give President Obama “fast-track” trade authority: The trade agreements the Obama administration is negotiating with the European Union, 10 countries in the Pacific Rim, and Canada are another casualty of election-year politics, and the president should be given fast-track trade authority so he can finish them. These nations represent 60% of the world’s economy, but organized labor would like to pretend the rest of the world doesn’t exist, so their favorite marionette, Senate Majority Leader Harry Reid, has pulled the strings on fast track. Such delays harm the overseas sales of Wisconsin and American manufacturers and farmers.
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Lower the corporate tax rate: Now set at a highly uncompetitive 35%, our corporate tax rate is keeping dollars overseas that could be put to use here. How to repatriate corporate profits held abroad? Robert Pozen, a senior lecturer at the Harvard Business School, offered a constructive suggestion in a Wall Street Journal op-ed: In exchange for lowering the corporate rate to 30%, we could establish a 17% tax (the average marginal rate paid by corporations in advanced industrial countries) on all foreign profits of U.S. corporations. Those moves would be partially revenue neutral. Closing unpopular tax loopholes like the favorable treatment of corporate jets could pay for the rest of the tax cut.
My preference would be a 25% corporate tax rate because the resulting rise in business activity — taxable business activity — would generate more revenue to the government, not less.
Combined with our energy boom, these steps could get America growing more robustly. Who isn’t up for that?
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