Good Ideas From the President That Need Real Support

As President Obama delivers his State of the Union tonight, he does it against the backdrop of a contracting economy and rising unemployment. As the nation tunes in to hear him chart a path for our nation’s prosperity, there are three policy prescriptions the President has already endorsed that, if fully implemented, could provide hope for growing the economy in the near-term. They are comprehensive corporate tax reform, unleashing a powerful broadband information sector, and pursuing unabashedly free and open trade that includes the exporting of domestic natural gas.

These ideas together, and even individually, have the power to unleash American investment and productivity.

First, the United States has the highest corporate tax rate of any developed nation in the world. We know that rate has had a demonstrable and deleterious effect on economic growth. As American companies pile up cash overseas, the corporate tax rate here at home dampens investment, stifles ingenuity, and diminishes the competitive standing of American business in the global market.

The 35 percent marginal tax rate on corporate profits must be reduced, certainly. However, the real, fundamental reform that President Obama has consistently sought requires more than a rate reduction — it requires simplifying the code itself. And when doing that, the guiding principle for both Democrats and Republicans should be ensuring that our tax code is “uniformly and fairly applied” throughout business.

The U.S. tax code should not be wielded as a means of choosing winners and losers, nor should it be used to penalize companies that have achieved success. Reform that ignores these principles would fall short of the President’s goals and would represent no real reform at all.

Second, beyond reforming the tax code we should look to our past for clues as to what can help our economy in the future. A prime example is the global Internet economy – and U.S. dominance of the critical information technology sector from the beginning of its existence. This U.S. dominance is the result of massive private sector investment, which proved to be an irresistible force pulling the Internet from campus laboratories and propelling it around the world — illuminating discovery, perpetuating freedom, education and fostering enterprise in all corners of the Earth.