Left unaddressed, the nation's tax and spending policies will further encourage U.S. businesses to move their capital and create jobs overseas. CED Members urge lawmakers to join together on a bipartisan basis to simplify the tax code and adopt pro-growth regulations that neither impede nor favor any particular sector.
Robust economic growth also depends on reducing the national debt. If policymakers fail to enact a long-term plan, the proliferating debt will wreak havoc across sectors and generations, weakening the American Dream for the young and retirement programs for the elderly. Among CED’s recommendations is SaveGo, a bipartisan blueprint that sets a maximum level of the debt burden as a percentage of the GDP, and requires Congress to operate within those constraints.
CED Policy Recommendations
Reform Medicare. Establish competition on the basis of quality and price among traditional Medicare and Medicare Advantage plans.
Reform Social Security. Among other steps, enact means testing for high-income individuals, gradually raise payroll taxes, and use a more accurate inflation calculation to determine cost-of-living adjustments.
Pare back virtually all tax preferences. For example, provide a flat 15% refundable tax credit for charitable contributions, and for up to $25,000 per year (not indexed) of mortgage interest on a primary residence. In addition, eliminate the deduction for state and local taxes.
Reduce and flatten marginal tax rates. Create a two-bracket income tax with rates of 15% and 28%, and reduce the corporate tax rate to a flat 28%.
Eliminate tax preferences for capital income. Tax capital gains and dividends as ordinary income (with a top rate of 28%).
Simplify and unify tax credits for families. Establish both a flat refundable per-child tax credit of $1,600, and a refundable earnings credit (similar to the recent Marking Work Pay Credit but substantially larger).