Given the federal government?s precarious fiscal picture, Geoff Colvin uses his latest Fortune column to urge the 112th Congress to take bold actions.
One of the top items on Colvin?s list: Tackle the tax code.
Your goal is not to extract more money from taxpayers but to spur economic growth. Everyone agrees that our 3.7-million-word tax code is an abomination that encourages unproductive tax avoidance and burdens our economy with massive compliance costs. The beast has needed slaying for ages. Now, in the space of a few days, the bipartisan debt reduction panel has recommended a total overhaul, and President Obama has said he’s ready. Current tax policy is temporary, scheduled to change in two years. This is your best chance.
Don’t try to write a code that pulls more of GDP from the private sector into the U.S. Treasury. Even the Treasury’s projections acknowledge that getting more than 19% or 20% seems to be impossible. Focus instead on wiping out thousands of deductions, exemptions, and credits, then lowering tax rates. Let businesses and individuals base their economic decisions on economics. What a concept.
