America’s economy is in the doldrums again. Economic growth is weak—just 1.8% a year in the last quarter. Government spending is increasing—to a projected 25.3% of gross domestic product this year from 20.7% in 2008—while revenues are down to 14.4% of GDP from 17.5% in 2008.
Our nation obviously needs much stronger economic growth, and we need it now. To create new jobs and get America growing again, we have to unleash the economic engine of the business community, and that requires lower tax rates, less regulation and uncertainty, free trade rather than protectionism, and lower energy costs.
The unanswered questions are whether the Obama administration is more focused on higher tax revenues than business expansions, and whether the Republicans are more focused on expanding jobs than raising revenues. We may well see Democratic corporate tax reform as a mix of lowering rates offset by a broadening of the tax base so that businesses actually pay more to the government, while Republicans may look at a lowering of tax rates and a broadening of the base as a way to reduce taxes overall to spur business growth and overall economic growth.
America’s businesses can bring us out of our current economic doldrums, but Washington must let them succeed.