Even as the country struggles with slow growth and high unemployment, America remains resilient, capable of tackling great challenges including the looming year-end “fiscal cliff” and the vast national debt.
Success will require Congress and the administration to unleash the dynamism of the private sector, adopting policies that will result in the economic growth necessary to reduce our deficits and put our citizens back to work.
Tax reform must be a priority.
A serious short-term tax problem does loom. Unless Congress extends expired and expiring federal tax provisions, taxes could rise by $400 billion in 2013, threatening to drive the U.S. economy back into recession.
Business Roundtable has urged Congress to extend the expiring and already expired individual and business tax provisions through the rest of next year.
Such an extension would help ease the uncertainty that now discourages companies from investing and hiring.
An extension through 2013 would also provide Congress a prime opportunity to enact comprehensive tax reform, address the financial footing of entitlement programs, and adopt a long-term credible deficit reduction plan.
These actions will spur growth and restore confidence in the U.S. economy at home and abroad.
The revenues produced by sustained economic growth are essential to deficit reduction. Imagine trying to solve America’s fiscal troubles in a time of falling revenues; deep spending cuts and Greece-like austerity programs would surely be required.
Indeed, the Office of Management and Budget estimates that a sustained increase in the growth rate of the economy of one percentage point will reduce the deficit by more than $3 trillion over the next 10 years.
Significantly, faster economic growth will also boost the income of American workers.
Unfortunately, the U.S. tax code today has created a climate that works against growth.
The United States now labors under the highest statutory corporate tax rate in the developed world.