A must-read article by a great American: George P. Shultz (WWII Marine, economist, OMB director, Sec of Treasury, Sec. of State & business exec.). In the piece Shultz lays out these 5 actions to get America back on track: (1) Cleanse the personal income tax system of deductions and lower the marginal rate on a revenue-neutral basis. The template is right there in the 1986 Tax Act, which passed the U.S. Senate 97-3. (2) We all know that corporate taxation is an anachronism. Why do we want a system that encourages American companies to reincorporate abroad? Let the earnings they make in other countries be taxed there, and thats it. Why give incentives for companies to keep their cash offshore rather than invest it in the U.S.? And lets lower the corporate tax rate to be competitive with the rest of the world. How about 20%? (3) We all know that the maze and uncertainty of the regulatory octopus is stifling the economy. Regulations are needed, but they can be made simpler and designed to work better. Overhaul the current complexity so that even small businesses can see how to comply without having to hire compliance advocates they cant afford. (4) While we are reducing uncertainty, why not take the mystery out of the Federal Reserve? The Fed can establish a rules-based monetary policy with the ability to deviate from the rules as long as they publicly explain why, using cost benefit thinking in the explanation. (5) Get control of spending. Otherwise the burden of servicing government debt when normal interest rates return—a burden that already amounts to hundreds of billions annually—will be unbearable.
Posted on: Sat, 09 Aug 2014 14:42:23 +0000
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