Story first appeared in The Detroit News.
The two of us are the CEOs, respectively, of a company that offers staffing solutions to a diverse array of companies throughout the country and of the Small Business Association of Michigan. From where we sit, we have a strong sense of the expectations and concerns shared by businesses of all sizes, both here in the Great Lakes State and all across America. While both small and large businesses have made great strides in recent years, they still express frustration over a distinct lack of policy certainty emanating from our elected leaders in Washington.
The message that is constantly being conveyed to us is that if lawmakers could find a way to come together on the major fiscal challenges facing the country today — namely our soaring national debt — they feel as though the full potential of the economy would become unleashed. We agree that if policymakers begin to address our unsustainable national debt, business leaders will be armed with the confidence they need in order to thrive.
Slowing the growth of our unsustainable national debt will take a comprehensive approach, one that looks to all parts of the budget and both sides of the accounting ledger for solutions. On the revenue side, we are both pleased that one of our elected leaders pushing the hardest for fundamental tax reform is our fellow Michiganian Rep. Dave Camp, chairman of the House Ways and Means Committee.
We have been following Camp as he attempts to pressure his colleagues into helping him undertake a true re-write of the tax code, which, right now, is outdated and horribly inefficient.
Each year, individuals and corporations waste countless hours and resources on navigating the code’s confusing maze of rules and regulations. Comprehensive and pro-growth tax reform would benefit all Americans in the long run by making the code simpler and fairer — not to mention more conducive to economic growth.
By “more conducive to economic growth,” what we mean is this: With our current code, there are so many deductions, exemptions and preferences — well over $1 trillion per year in lost revenue — that individuals and companies face all kinds of perverse incentives to lower their tax liabilities rather than to grow their business and help boost the economy. Collectively, incentivizing such choices at the individual or corporate level distort our economy and put a drag on growth.
Moreover, many of the code’s scores of preferences expire each year and take a Congressional action to extend. Right now, it’s hard to depend on Congress to take action on much of anything, and, as such, it is impossible for businesses to confidently make concrete plans about when exactly to make a new investment in equipment or personnel – certainly not when the policy environment is so in flux.
This is why we’re both strong supporters of the “blank slate” approach to tax reform favored by Rep. Camp and Senate Finance Committee Chairman Max Baucus, in which all preferences are eliminated from the code, marginal rates are dropped and the bar for a tax preference to be added back in is very, very high.
While we will support efforts to reform the tax code as best we can, we know that tax reform alone will not alleviate all of our fiscal woes. Any viable debt deal must include structural changes to our increasingly-costly entitlement programs, as well as intelligent cuts to wasteful or low-priority spending programs. Each of these areas of the budget must be addressed if our massive debt burden – larger than at any point in the last 60 years as a share of the economy – is to get under control. In addition to reducing the threat of a debt-fueled fiscal crisis, real progress towards a comprehensive deficit-reduction agreement would do wonders to instill confidence in the business sector and aid economic growth over the long-term.
This fall presents a host of opportunities for Washington to find areas of common ground on these tough issues. We feel it is critical to let our representatives in the nation’s capital know that crafting a pro-growth deal to reduce the deficit is both desirable and attainable, which is why we are both members of the Campaign to Fix the Debt. The Campaign was founded to help Congress and the President enact a plan to gradually reduce the national debt as a share of the economy – a plan that would let the American people know Washington has clear goals and policy objectives centered on restoring order to our nation’s fiscal house.
Here in Michigan and across the nation, we’re on the road to economic recovery. But we’re not there yet. Let’s get where we need to be by fixing the tax code and fixing the debt.