No, High Joblessness is not "Normal"
by Tom Pauken on June 30, 2011 at 11:30 AM
The following letter by me appeared in Sunday’s edition of the Dallas Morning News:
“High joblessness may be ‘normal,’” was the headline of a story in Monday’s Business section of the News.
When it comes to creating new jobs, some economists appear ready to throw in the towel, but high unemployment doesn’t have to become the “new normal.” We can get Americans back to work, but only if policymakers summon the courage to embrace policies that address sluggish private sector growth and the outsourcing of jobs overseas.
The best solution is to reform our nation’s corporate tax system which is the most onerous in the world, with its 35% corporate income tax rate and 7.5% employer portion of the payroll tax. We should replace the existing corporate tax system with a revenue-neutral, 8% business consumption tax that would be applied to all goods and services coming into the U.S. Companies exporting from the U.S. would receive a tax credit against their business consumption tax.
The current tax system rewards private equity moguls for loading up companies with high levels of corporate debt since debt is deductible, while capital investment, employment, and savings (the engines of private sector growth) are punitively taxed. Switching to a business consumption tax would bring jobs home to America, reduce our trade deficits, grow the private sector, and begin the rebuilding of our manufacturing base.
Chairman, Texas Workforce Commission