It is, however, becoming increasingly clear that our country’s inefficient and convoluted tax code is standing in the way of our members’ goals. So you can imagine our collective sense of optimism when Senate Finance Committee Chairman Max Baucus (D-Mont.) and House Ways and Means Committee Chairman Dave Camp (R-Mich.) paid a visit to Silicon Valley on their nationwide tour to promote the many benefits of comprehensive tax reform. As Baucus and Camp pointed out to us, fixing our broken tax code is key to sparking a more prosperous economy both here in Silicon Valley and across America.
In its current form, our tax code is a confusing mess of preferences, exemptions and deductions that both individuals and corporations dread toiling over each year. In an attempt to do away with these economy distorting practices Baucus and Camp have adopted the helpful “blank slate” approach, wherein rates are lowered and all preferences are eliminated from the code and only added back in if it is proven that they help promote economic growth. The price of adding preferences back into the code is higher rates. Starting with a blank slate, Baucus and Camp argue, will force lawmakers to realize the cost of tax preferences. The more preferences, the higher the rates or the larger the budget deficit, the rationale goes.
And as Baucus and Camp stated during their visit, tax reform can also, by way of opening budgetary room for public policy priorities, help to fuel research and development – vital areas of business that are at the core of what companies in Silicon Valley are all about.
Making our tax code more efficient and easier to navigate would actually go a long way towards addressing a much larger economic problem currently facing the nation – our soaring national debt. With the national debt larger than it has been in over 60 years, it is time for our elected leaders to confront this problem head on. Our country’s unsustainable debt burden could very well lead to higher unemployment, interest and inflation rates, creating a nightmare scenario for the American people and the companies that drive the economy.
Washington needs to provide a clear set of fiscal policies centered on intelligent deficit reduction – comprehensive tax reform being a central part of this effort – in order to give both individuals and corporations the confidence and certainty needed to maximize their potential.
But reversing the upward trajectory of the national debt and reforming the tax code are not easy propositions. There are many that benefit far too much from the current status quo and will undoubtedly put up a fierce fight against these necessary reforms. Fortunately, we can rely on the leadership of Baucus and Camp to guide these critical efforts and shine a light on the immeasurable benefits of tackling these challenging issues.
In order to show my support for their efforts I am a member of the Campaign to Fix the Debt – a nonpartisan group of business and policy leaders and grassroots activists who understand that tax reform is crucial to lowering the deficit and getting the economy back on track.
A simpler, fairer tax code would ultimately benefit everyone, pure and simple. Let your elected officials know how important pro-growth tax reform is to restoring the health of the nation’s economy. And be sure to show your support to Baucus and Camp should their tour make a stop in your town.
Guardino is president and CEO of the 375-member company Silicon Valley Leadership Group.