It’s time for fair tax reform

Congress may be facing its best opportunity in years to approve genuine tax reform. While the talk calling for reforms is continual, the reality window appears to be opening. It is time to take advantage of the opportunity, but it is also critical that the reforms be fair and lead to economic stability.

As Treasury Secretary Jack Lew pointed out recently during a talk at the Peterson Institute for International Economics, the business tax code is broken. That is nothing new to the business community. We see businesses considering mergers simply to move their headquarters overseas and thus lessen their tax burden in order to stay competitive. About $2 trillion in cash of U.S. businesses is sitting overseas because U.S. tax rates are comparatively so high.

{mosads}Even within the country, various industries are taxed at various rates, leading to the call for tax reform. According to a New York Times examination of tax data, energy companies are taxed at an effective rate of 37 percent, with industrials coming in at 24 percent. Apple itself was taxed at 14 percent according to the study.

No one loves to pay taxes. But Americans are willing to fund our government if the tax system is fair. So fairness should be the price of entry for any tax reform.

That means we need to put an end to efforts such as that by the administration to impose even higher taxes on energy companies. Targeting companies because they are successful is the wrong thing to do. Our too-slow progress out of the recent recession could have been faster had we been more willing to go the extra mile to support industries that were growing and putting Americans to work in good jobs. But too many just wanted to punish Big Oil, it seems.

In addition to fairness, businesses are looking for stability before they invest the huge sums of money needed to grow our infrastructure, create new jobs and bet on our future. Unfair attacks leave businesses wondering who will be next. Before leaders invest, they want to know that they will get a fair shake. There needs to be some predictability about where taxes are going. No person, business or industry should be concerned about being between Washington’s crosshairs and facing unfair taxes.

Inequity is not the only reason the time is right for tax reform. Congress has been mired in debate over whether the reform should be accompanied by a significant reduction in the deficit. But Lew reports that the deficit is half of what it was late in the last decade and on a downward trajectory. So in his words, it’s time “to simmer down, because emotions were a little bit too high to make the kind of progress that we ultimately need to make in a collaborative, bipartisan way.”

We need to address the issue of tax reform squarely on, without calls of “deficit, deficit” keeping us from achieving comprehensive tax reform that leads to fairness and greater stability. The resulting economic boost and job creation will in and of itself address the deficit problem by making more people tax-contributing citizens and self-sufficient.

Alford is the president and CEO of the National Black Chamber of Commerce.