Manufacturers continue to hope this year’s State of the Union speech, to be delivered by President Obama tomorrow night, will include a 2016 resolution to what would finally be a demonstrated commitment on the kind of comprehensive tax reform that will result in a pro-growth, competitive tax code.
We’re told that the president plans to deliver an optimistic outlook on the improvements over the past seven years of his administration, highlighting “the road traveled the past seven years…to recover from crisis.” It’s hard for many to be optimistic about the economy even now, over six years after the official end of the “great recession.” In fact, while there are certainly success stories, global headwinds continue to buffet our economy and manufacturing in particular.
The president’s preview video says that he will also talk about the things that need to be done in the future. So, what can Washington do to help turn around this trend? High on manufacturers’ list has long been enactment of comprehensive tax reform, one that would return the United States to a competitive position versus our international peers.
Last January, the NAM released a study, titled A Missed Opportunity, which laid out the economic cost of delayed tax reform. This study detailed the benefits to be had from enactment of pro-growth comprehensive tax reform that reduces the corporate tax rate to 25 percent or less, shifts to a competitive international tax system, a permanent R&D incentive, robust cost-recovery provisions and lower rates for pass-through businesses.
In sum, we found that implementation of tax reform with these provisions would, over 10 years, contribute more than $12 trillion in GDP, increase investment by $3.3 trillion and add more than 6.5 million jobs to the U.S. economy. That these provisions are elemental for a pro-growth tax reform is not revolutionary. Even still, comprehensive tax reform continues to be a future goal.
However, since the theme is optimism, we will remain optimistic that progress will be made and that the need for comprehensive tax reform will move from a resolution for “the future” and become a resolution for now.
Learn more about the NAM’s tax reform priorities by clicking here.