“What we need as alternatives from the President, from his Council of Jobs and Competitiveness, and from Congress are:
…4. Alternatively, consider a modest value-added-tax or VAT on the order of 5% that reduces both corporate income and payroll taxes and includes thoughtful exemptions. Perhaps more than any other single systemic initiative, this combination would spur investments, help America grow its way back to good economic health, and materially reduce the deficit. Replacing growth-choking taxes with a modest VAT while eliminating the incentives to move production out of the U.S. could also be the basis of a new grand bargain between progressives, who oppose slashing programs that millions of Americans depend on more than ever, and pro-business conservatives, who favor lower corporate and payroll taxes.
President Obama says we have to retool our economy to “win the future.” A key pillar of this initiative must be a corporate tax policy that helps U.S. corporations grow and prosper, incentivizes job creation here at home, ensures that corporate America makes their fair contributions to the fiscal needs of our country, and will encourage the kind of responsible corporate leadership that will allow this country to responsibly lead the worlds’ economies in the future.”
Leo Hindery, Jr. is Chairman of the US Economy/Smart Globalization Initiative at the New America Foundation and a member of the Council on Foreign Relations.