With February upon us, many Americans’ New Year’s resolutions have already slipped and some of our personal predictions for the year have fallen by the wayside. However, one prediction remains on the mark: TAX REFORM IS GOING TO BE CHALLENGING. Tax policy is incredibly complex, and taxpayers have many different priorities and tax situations.
Business Roundtable welcomes President Obama’s focus on jobs and economic growth, along with the renewed call for tax reform he made in his Jan. 28 State of the Union address. Notwithstanding an encouraging report on fourth quarter GDP, the U.S. economy continues to underperform relative to its potential at great cost to workers, businesses, and taxpayers. The President’s remarks identified many of the economic challenges that must be addressed. Now the country needs our policymakers to enact the right pro-growth policies to address these challenges.
Congress and the Administration must act together to restore America’s status as the most attractive destination for investment in the world. Tax reform is a key ingredient for achieving that goal. A reformed tax system done right can allow America’s economy to thrive, resulting in more and better-paying U.S. jobs.
Indeed, Business Roundtable’s “Invested in America: A Growth Agenda for the U.S. Economy,” highlights tax reform as one of the critical areas demanding action. (The others being trade, immigration reform and fiscal stability.)
In last year’s budget submission, the President called for revenue-neutral business tax reform, and we urge him to again include this proposal in his FY2015 budget. Tax reform must address the competitiveness of all businesses to fully strengthen the U.S. economy, enhance job creation and enable American workers and businesses to compete effectively in the global marketplace. Congress should pass comprehensive tax reform that establishes competitive tax rates and a modern system of taxation for overseas earnings.
Additionally, a well-designed tax reform plan will use all revenues from corporate base-broadening measures to achieve a globally competitive corporate tax rate and to modernize our international tax system. Proposals to direct base-broadening revenues for other purposes will make it that much harder to achieve tax reform that will sustain a strong U.S. economy. Likewise, those calling for one-off tax increases on specific industries outside of comprehensive tax reform are promoting bad economic policy and obstructing pro-growth tax reform.
America’s business leaders are confident that tax reform can lead to robust economic growth resulting from increased business investment and job creation. The additional revenues produced by economic growth will permit funding of such priorities as investment in a first-class infrastructure.
Nearly every policymaker agrees that our tax system is wrecked and in critical need of repair. Yet many pundits and policymakers have already proclaimed – one month into the new session of Congress – that there is too little time left to advance tax reform this year.
Business Roundtable disagrees with these pessimists. Reform of our tax system is too important just to close up shop. We are pleased by reports from last week’s House Republican Conference about the positive discussions around comprehensive tax reform led by Ways and Means Chairman Dave Camp (R-MI). Similarly, we at Business Roundtable will step up our advocacy as we push for enactment of comprehensive tax reform.