Right now, the U.S. is bypassing the chance for an economic renaissance because of its outdated corporate tax system. A comprehensive revenue-neutral reform that lowers the corporate tax rate, moves America to a hybrid international tax system, and eliminates tax breaks and preferences would achieve this goal without increasing the deficit. Indeed, by promoting faster growth, such a reform would contribute to long-run deficit reduction.
Reform will not be easy. But nearly 30 years after the last reform, we know what the problems are and we know the principles behind sensible solutions. Now Congress and the administration need to act.
Douglas Holtz-Eakin was director of the Congressional Budget Office under President George W. Bush. Dr. Laura Tyson chaired President Bill Clinton’s Council of Economic Advisers. They serve as economic advisers to the Alliance for Competitive Taxation, a group of 42 leading American businesses supporting comprehensive tax reform.
Vice President Joe Biden waits to conduct a mock swearing-in ceremony with Sen. Brian Schatz, D-Hawaii, in the Capitol's Old Senate Chamber, December 2, 2014. Schatz was sworn in to serve the remainder of his term since he was appointed to the seat after Sen. Daniel Inouye, D-Hawaii, passed away.