Next, to enable American companies to compete with those overseas, lawmakers should reduce the corporate tax rate to 25 percent (good) or lower (and the lower the better). And make this change last at least a decade, if not permanently. American companies today toil under some of the highest corporate tax rates in the world. Lowering these rates will encourage growth and create jobs.
Another help: Further reduce marginal income tax rates for at least five years. That beats a one-time tax holiday if you want to reassure working families that their taxes will be affordable in the years ahead.
Finally, Congress should extend “bonus appreciation” for at least two more years. This allows a business to deduct half the cost of equipment it buys in the year it’s purchased. That makes new equipment more affordable and thus encourages businesses to upgrade, a policy that helps get the economy moving. It would be like a green light to America’s job-creators.
Lowering tax rates on capital and labor is the best possible tonic for our economic ailments.
A “tax holiday” certainly trumps another big spending “stimulus” package, because it would allow Americans to spend more of their money on what they want. But to really kick-start our economy, lawmakers should choose a third way: Get tax rates down for years -- or permanently.
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