Big corporations employ millions of Americans, but the majority of Americans work for small businesses. The goal of a prosperous and thriving economy is to build an economic climate, and tax policy, that encourages growth, business expansion and more jobs.
With a national unemployment rate that is stuck at more than 9 percent and into double-digits in a number of states, and a weak growth rate hovering around 1 percent, it's clear that President Obama's policies of the past three years have been an utter failure. Only 58.1 percent of our population is working. That's the lowest percentage since the early 1980s.
The way out of this recession is not to raise taxes on corporations and other businesses, but to reform our tax code to stimulate growth.
We have a corporate tax structure today that sets the top rate at 35 percent -- the second-highest corporate tax rate in the industrial world. It's triple Ireland's tax rate, and 10 points higher than in Austria, China or Denmark. Only Japan's is higher at 39.5 percent, though it plans to lower its rate this year.
It is no secret that few corporations pay the top rate because of a maze of tax breaks, loopholes and other ways to write off various expenses, losses and even offset foreign tax bills. They have been written into the tax code by Congress over many decades. But now the tax system is in need of a thorough cleansing to eliminate many of these tax breaks and significantly broaden the tax revenue base, while at the same time lowering the overall tax rates.
President Obama's bipartisan deficit commission proposed doing just this in a plan last December that would effectively bring in more revenue by plugging or shrinking tax loopholes, while lowering the top tax rates to 28 percent or less.
Unfortunately, Obama did not embrace his own commission's recommendations, preferring to demagogue against "millionaires and billionaires" and big corporations whom he claims are not paying their "fair share."
That may appeal to Obama's narrowing base of anti-business supporters and lead to heckling Republican presidential candidates, but it doesn't offer any pro-growth, pro-employment solutions to get the battered U.S. economy back on track.
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