But all business is asking for is some clarity and certainty regarding government intentions, especially on taxes and regulation. Take, for example, the new 2,300-page bank-regulation bill, which spreads 243 new regulatory provisions across ten agencies. No one really knows what’s in this document, or what the unintended consequences will be. Until people figure this out, it could freeze bank lending for years.
The Obamacare health bill similarly includes tax hikes and regulatory overreach that not only adds to business hiring costs but could put a freeze on the expansion of one of America’s most vibrant private-sector industries. Meanwhile, threats of EPA carbon regulations only add to the cost burden for business.
An overwhelming consensus of business executives is now pleading for tax relief. FedEx CEO Fred Smith has been leading the charge for a lower corporate tax rate to make America more competitive. Eli Lilly CEO John Lechleiter says America has lost its innovation advantage, falling way behind firms in other nations, especially in Asia.
The business community also wants an acceleration of business investment-tax write-offs. Studies show that $1 of faster depreciation for investment in plants and equipment increases GDP by nearly $10. Team Obama has granted this to the very tiniest companies, but won’t universalize it for all companies.
This, even while the president concedes that business investment creates jobs. So why is the administration stubbornly opposing a tax incentive that could ignite dormant animal spirits and unleash a wave of job-creating investment?
The best thing to come out of the administration this summer was Treasury Secretary Tim Geithner’s pledge to me in a CNBC interview to place a 20-20 limit on tax rates for investor capital gains and dividends. No one, most of all me, wants to see any increase in these tax rates. But at least the Geithner pledge means investment tax rates will stay low. The stock market took a turn for the better right after the interview.
The moral of the story? Federal taxes and regulations matter. Instead of demonizing business, Obama and his crowd should start listening and acting on the recommendations of our business leaders. Most of these people are not politically partisan. They’re trying to do good for the economy and the country.
Frankly, they know more about this than the president does.