Taxes are another problem. The U.S. score isn’t helped by the fact that the U.S. tax structure relies so much on taxes on capital and investment, which restrict growth. Regulations continue to grow in number, making it harder than necessary for our economy to recover. How bad is it? More than 70 major rules have been imposed since 2009, and they cost Americans nearly $40 billion last year.
The deterioration of the U.S. score on freedom from corruption is especially troubling. Blame the government (read: taxpayer) bailouts of troubled industries such as automakers. These create the perception of corruption. As far as many Americans are considered , it’s politically well-connected companies and special-interest groups who get the breaks. They see the more than 1,100 companies that have won exceptions to Obamacare, and they can’t help but wonder if some form of cronyism is involved.
We can’t hope to create the number of jobs we need under these conditions.
That’s why we have to get serious about cutting government down to size, overhauling our tax system, and transforming costly entitlement programs. Otherwise, the United States has just completed its last year as a top-10 finalist in the Index.