It takes a sense of optimism and courage to take the risk to start, expand or operate a business — whether it is a local store, a restaurant, a professional services office or a Fortune 500 company. That optimism and courage is an integral part of the American Dream — where we look at the future with a sense of confidence and belief that we are only limited by our imagination, ingenuity and hard work.
Unfortunately we have seen some of that confidence shaken with a weak economy, costly health care mandates and thousands of new burdensome regulations. And this past week America earned the distinction of being number one in the world — not for innovation or technology — but for having the highest tax on job-creating businesses. It’s not a distinction any country should want. In fact, most of our international competitors have been reducing their taxes on businesses.
Americans are the most productive, innovative and hardest-working people in the world. It is not the quality of the American people that is limiting economic growth. With a 35% tax on our job-creating business, the federal government is taxing America out of the competition and the American workers and consumers are paying the price.
As I travel throughout Virginia, I hear from business owners who are worried about whether they can keep their doors open in these tough economic times; whether Washington’s increasing tax and regulatory burdens will force them to let employees go or drive them out of business altogether; whether the enterprises they spent a lifetime building will survive to pass on to their children.
The good news is that with one policy change we could send a clear message that America is open for business again. And there are hopeful signs that those in Washington may be willing to put aside their differences to get it done.
Last spring I released my “Blueprint for America’s Comeback,” where I called for Washington to reduce the tax rate on job-creating businesses to a simpler, lower, fairer tax of 20 percent. The international average is 25 percent; I think America should be better than average. Reducing the U.S. tax rate to 20 percent on job producers would add more than 500,000 private-sector jobs a year — that’s more than 5 million new jobs for Americans in the next 10 years. A vibrant economy with more investment and businesses prospering means more jobs and revenue. And, with a territorial system we can eliminate double taxation of American business.
In recent months we have heard many in Washington — Republicans and Democrats in and out of office — discuss various plans to reduce this tax. Some have called for smaller or larger reductions to the rate than what I propose, but we clearly have the building blocks for achieving positive results. I know from experience that leaders from both parties can put aside their differences when there is urgency for action.
When I was elected Virginia’s governor, I worked with a Democrat majority legislature to cut taxes, make neighborhoods safer, enact historic welfare reforms, freeze tuition, reduce the size of government, bring accountability for academic performance in schools, build a Rainy Day Fund for the future and foster the environment that saw the creation of more than 300,000 net new private-sector jobs in just four years. I did the same in the Senate — working with my Democrat colleagues to remove and keep taxes off access to the Internet, appropriately increase the death benefits for families of fallen service members, advance nanotechnology and focus on cyber security. There were disagreements along the way but we solved our differences to get positive results for America.