It is important that all Americans understand that tax reform will drive growth that benefits everyone. While nobody is going to get everything that they want in a policy debate, it is time for companies and Congress to set parochial and partisan interests aside to find a way to pass tax reform. Let’s judge any proposal on whether or not it will result in greater economic growth, more jobs and higher wages while allowing American businesses to be competitive internationally. If so, let’s get it done.
It isn’t easy or simple to stay ahead, particularly in an increasingly competitive global marketplace, and national tax policy is one critical area where we are falling behind. The good news is that there is general agreement that Congress and the Administration should act, and the recent release of a tax reform framework by leaders of Congress and the Administration was an important step forward. The framework has all of the key ingredients to fuel economic expansion: a business tax rate that will make the U.S. competitive around the world; provisions to free U.S. companies to bring back profits earned overseas; and importantly, tax relief for the middle class.
As chairman of Business Roundtable, a group of more than 200 CEOs of the largest employers in the country, I’ve been beating the drum to put our individual interests aside and do what is best for the country as a whole. Tax reform is important because strong businesses create jobs and higher wages. Estimates by the accounting firm EY provided to the Business Roundtable show that a competitive 20% corporate tax reduction could support the creation of as many as 2 million new jobs if the tax savings went to new job creation. According to a recent survey, 76 percent of CEOs of leading U.S. companies say that they would increase hiring if tax reform were enacted, and 82 percent would increase capital spending. That is meaningful commitment to invest in America, and will move the needle for job creation and wages in this country.
Our current tax code is uncompetitive, overly complex and loaded with special interest provisions that create winners and losers. This drives down capital investment, reduces productivity and causes wages to remain stagnant. Under our current system, workers bear up to 75% of the corporate tax burden through lower wages.
Tax reform can and should do more for lower- and middle-income workers by expanding programs such as the earned income tax credit, which lifted 7.3 million workers out of poverty in 2014, according to an AEI study.