CEOs Agree on Tax Reform and Deficit Reduction
On Wednesday the Tax Relief Coalition, a group made up of notable business councils including the U.S. Chamber of Commerce, National Associations of Independent Business and the National Association of Manufacturers, released a letter urging replace the fiscal cliff with a comprehensive deficit reduction plan using both tax reform and entitlement reform.
The looming fiscal cliff is growing closer and threatening and our economic recovery, so it is good to see more CEOs and business leaders call for action to replace the cliff. The Tax Relief Coalition writes:
TRC welcomes the recent action of corporate CEOs calling for action to avoid the looming fiscal cliff. We firmly believe that reforms of our tax code and entitlement systems is necessary to get our country back on a path to fiscal sanity.
They also called for a bipartisan debt reduction plan earlier this year in a letter to members of Congress:
TRC members believe that a credible bipartisan plan for long-term deficit reduction and economic growth would produce the immediate benefits of reducing uncertainty and improving financial stability and set the stage for long-term deficit reduction through comprehensive tax and entitlement reform.
The Tax Relief Coalition is worried about the increase in marginal rates that come with the fiscal cliff, arguing that it would be especially harmful for the millions of businesses that are organized as pass-through businesses and taxed through the individual code. Base-broadening, rate reducing tax reform could both raise more revenue and reduce tax rates, spurring more growth. Entitlement reform also needs to be included in the conversation, with health care spending as the greatest future driver of our unsustainable debt.
This is very much in line with what the Fix the Debt campaign argues; everything needs to be on the table with both revenue increases and spending cuts. Specifically, the campaign lists in its core principles that a plan should include reforming Medicare and Medicaid, strengthening the Social Security program by giving it solvency, and engaging in comprehensive and pro-growth tax reform that raises more revenue while broadening the base and lowering rates. If we are willing to put everything on the table, we can stabilize the debt and put it on a downward path without instituting the drastic spending cuts and tax increases in the fiscal cliff.
It's good to see both business leaders and citizens actively engaged in the current debate about the budget. We can replace the fiscal cliff with a plan that addresses all parts of the budget, but we are going to have to make the tough choices. With the stakes so high, everyone needs to be involved.