Tax Day Media Availability: Three Decade Tax and Economic Policy Expert Available to Discuss Do’s and Don’ts for Upcoming Tax Reform Debate
Following President Obama’s address on the country’s spiraling debt, an op-ed in today’s edition of USA Today by ACCF President and CEO Mark Bloomfield highlights the dangers of the country’s looming fiscal train wreck and how tax reform must be a critical part of the debt reduction equation. Many proposals on the table from the President’s Deficit Reduction Commission to Rep. Paul Ryan’s Road Map include tax reform plans. In his USA Today piece, Bloomfield offers some important “do’s and don’ts” on tax reform to lawmakers that will not only stimulate economic growth and jobs, but set the nation back on a path to prosperity once again:
Do: Adopt lower, flatter tax rates. The numbers can be hammered out later, but the U.S. corporate tax rate, at 35%, will soon be the highest in the world. Nearly all economists agree that lower corporate and individual tax rates stimulate economic growth.
Don’t: Forget how to pay for it. Lower, flatter rates create more economic growth but not enough to avoid tame our spiraling debt. The first effort must be fair, fundamental spending cuts that don’t jeopardize economic growth. The second is a no brainer -end tax loopholes for special interests. Third, popular but costly deductions like home mortgage interest, medical expenses and charitable contributions must be curtailed or eliminated.
Do: Harness the tax code to make America prosperous and competitive again. Once we get out of the current economic downturn, the U.S. must boost long-term saving and investment. This requires a fundamental shift in what we tax. Today, savings, investment and hard work are taxed excessively. Meantime, the tax code essentially rewards consumption and spending, whether it be a new car for your teenager or that vacation home. Similarly, business investment in new factories, machinery and start-ups that create jobs shouldn’t be penalized at tax time. Better tax treatment of savings and investment yields greater return than any government program. In a recent study, Dr. Allen Sinai of Decision Economics concluded that eliminating the capital gains tax would create jobs at a cost to the federal government of only $18,000 per job. In contrast, recent federal stimulus programs have created jobs at a cost of $300,000 per employee.
Mark Bloomfield is a three-decade veteran on tax policy debates and was profiled last year in Wall Street Journal’s Weekend Interview, the Next Capital Insurgency, where he discussed the parallels between today’s socio-political climate and those of Jimmy Carter-era. Bloomfield’s full bio is available here.
Dr. Margo Thorning, Senior Vice President and Chief Economist for the American Council for Capital Formation, is an internationally recognized expert on tax, environmental, and competitiveness issues. Thorning manages all ACCF research projects related to tax policy.
Mark Bloomfield and Margo Thorning are available for interview; contact Mike Burita at [email protected] or 202.420.9361.