Lower taxes may be the economic elixir for many candidates in Tuesday’s election. But it’s worth noting that among those with the closest vantage point to the economy, lower taxes aren’t the top priority. Deficit reduction is.
Late last month, CEOs from dozens of well-known firms — Microsoft, Weyerhaeuser, Delta Airlines, Cisco, Honeywell, UPS, Motorola Solutions, Dow Chemical, General Electric, Bank of America, Aetna, Time Warner, Goldman Sachs, JPMorgan Chase, and more — released a statement calling for a deficit-reduction package that includes not just more budget cuts but more revenue.
The statement was done under the auspices of Fix the Debt, founded by Alan Simpson and Erskine Bowles, co-chairmen of the Simpson-Bowles Commission. Thus, it’s not surprising that the business leaders favor a framework like the one the commission proposed. Along with cuts in projected spending, they call for lower tax rates on a broader tax base — but with a rate/base combination that will bring in more tax dollars, as President Obama has proposed, rather than the revenue-neutral approach promised by Mitt Romney.
Almost everyone agrees that more budget cuts will be necessary. The real value of this public statement is in demonstrating that much of the business community has come to recognize a second reality: New revenues are also needed.