In any event, Friedman goes on to explain that our economic future is at risk. He quotes the CEO of Intel, Paul Otellini: “The things that are not conducive to investments here are [corporate] taxes and capital equipment credits. He says he opened a plant in China because, “the cost of operating when you look at it after tax was substantially lower.”
Again, agreed.
The U.S. has the second-highest corporate tax rate among developed nations. That drives business overseas and makes domestic firms less competitive. Let’s slash that rate especially since corporations don’t pay taxes -- their customers (that’s all of us) do.
Friedman also adds that our education system isn’t turning out the skilled labor we’ll need to be competitive in the future. Otellini cites a study that measured, “16 different metrics of human capital -- I.T. infrastructure, economic performance and so on.” It ranked the U.S. last out of 40 nations.
We could improve education. A good first step would be reforming the public education system so that, instead of favoring teacher unions, it empowers students and parents. If students could pick their own schools, schools would need to compete with each other. That competition would end up making them better.
Here’s the rub: the Obama administration and liberals in Congress aren’t dealing with the problems Friedman has so ably highlighted.
Instead of slashing tax rates to create jobs and improve competitiveness, the president has spent more than a year trying to hammer through a big-government health care plan that would increase regulation, decrease innovation and cost more than a trillion dollars.
For its part, the House passed a massive cap-and-trade bill which also would have hurt American competitiveness and made it more difficult to build anything. And members of both branches of government are serial stimulators. The $787 billion one passed last year didn’t work; in fact, it will make things worse because it doubled spending on the ineffective Department of Education instead of encouraging true reform.
Over-regulation and over-spending are dragging our economy down. It’s nice that Tom Friedman has recognized that. Let’s hope he’ll start to use his column to press for real solutions.