5. Make economics, business, and entrepreneurism studies compulsory in school curricula. At one time, reading, writing, and arithmetic marked the education of our populace. Over time, we added valuable requirements in subjects like history and geography. But over the last several decades, the education pendulum has swung toward subjects that have a tenuous relationship to good education and citizenship. As long as taxpayers are funding education at any level, we must educate our future generations about the true nature of their economic futures. They need to learn that private business, fact-based investing, innovation, and entrepreneurism will determine their own standards of living and the economic and political health of our country. Illiteracy in basic economics and entrepreneurism is a certain recipe for national failure.
6. Ensure that business tax rates are transparent and predictable. Uncertainty paralyzes decision-making in every realm of human activity. In our current political environment, business tax rates are being driven by ideological, not economically rational, considerations. As a result, entrepreneurs, their potential investors, and their potential customers all hesitate to make commitments. Although I hate to say so, even assured and measurable increases in marginal tax rates can be preferable compare to total uncertainty. It is another penalty that we suffer from when politics and ideology are directing our national policies.
7. Change tax laws to favor investment over debt. Our nation has been hurt as existing businesses employing millions of Americans have been bought and decimated by leveraged investment fund firms. These firms borrow heavily to purchase the going concerns, taking advantage of favorable income-tax-deductibility treatment of debt, and so turn a quick profit by firing workers, siphoning cash from the company, and letting it go under or trying to resell it quickly. A shift away from the tax advantage for debt would end many of these corporate dismemberments and job killers, and potentially promote additional investment for growth. If tax laws cannot be changed to favor investment, they should at minimum be neutral between them. In sum, privately funded, entrepreneurial, technology-driven companies are the key to our nation's economic growth, increased standard of living, and full employment. Government never has been and never will be capable of rationally growing our economy and jobs. Its primary role should be to promote policies that enable the private sector to prosper and realize our ever-changing economic potential. I don't believe in censorship, but I am tempted to forbid the falsehood that government can ever create any jobs other than government jobs. Moreover, government is also inherently driven by short-term, temporary, economic band aids. Just recently, former business school dean and Secretary of Labor and State George Schultz was joined by an elite group of scholars to critique the economically destructive tax-and-spending policies of the federal government. Among their wise policy recommendations, they point out that "long-lasting economic policies based on a long-term strategy work; temporary policies don't."26 I heartily endorse their opinions.
Excerpt: The Comeback: How Innovation Will Restore the American Dream. By Gary Shapiro, president and CEO of the Consumer Electronics Association. Published by Beaufort Books.