There’s a better way than tax-and-spend
March 18, 2009| By Nathaniel Ward
If massive spending isn't the right way to fix the economy, what should lawmakers do? Heritage experts have given members of Congress a number of suggestions.
Reducing tax rates and holding down spending would "reduce impediments to starting new businesses, hiring, working, and investing," Heritage's J.D. Foster explains. President Obama's budget goes the other way, he says. "The economy today faces massive tax hikes beginning in 2011, especially on small businesses, investors, and savers." This policy discourages job creation and economic recovery.
Heritage economist Karen Campbell says that repealing the corporate income tax would allow for more job creation in a relatively low-cost way. She notes that other countries have reduced corporate tax rates, putting U.S. businesses at a competitive disadvantage.
"At a time when U.S. employees are seeing jobs leave the country," Campbell writes, "a tax plan that increases the competitiveness of the U.S. business environment and encourages saving and investment by individuals would allow entrepreneurs to implement their ideas for dealing with the challenges of the 21st century. It would also encourage job-creating businesses to locate in the U.S."
Finally, Heritage's Terry Miller encourages G-20 leaders meeting in Britain not to embark on any grandiose schemes to "rescue" the global economy. "Only a restoration of trust in markets and the prices of assets will end the malaise into which we have fallen. In that regard, an announcement by the governments of the G-20 of what they will not do to intervene in markets would probably go a lot further in restoring trust than any announcement of joint action or new regulations."
Nathaniel Ward is the Editor of MyHeritage.org—a website for members and supporters of The Heritage Foundation.
