How Times Have Changed

In the WSJ there was the expected editorial from an unexpected source.  This is how Laura Tyson started off:

Corporate tax reform is one of the few issues that attract bipartisan support in Washington. Lawmakers from both sides agree that the current system is deeply flawed. Because the U.S. hasn’t updated its tax code in 31 years, Congress has a once-in-a-generation opportunity to level the playing field for American businesses and workers.

We have not detected as much agreement or enthusiasm from the Democrats as Laura suggests.  We are not even sure about the Republicans.  So who is Laura?  The brief bio at the bottom tells us.

Ms. Tyson is a distinguished professor of the Graduate School at the University of California and serves as an economic adviser to the Alliance for Competitive Taxation. She headed the Council of Economic Advisers and the National Economic Council during the Clinton administration.

We hope she knows something we don’t.  It would be great to see a bipartisan bill to reduce business taxes and specifically corporate rates.

Laura advises the Alliance for Competitive Taxation (ACT) which describes itself as a coalition of leading American businesses.  Most of us remember the Clinton administration.  We don’t remember Laura.  Perhaps we should have.  Here is an ACT summary:

Specifically, the coalition [ACT] believes a globally competitive tax system [for the US] would include:

  • A 20% or lower federal corporate tax rate.

  • A modern territorial tax system aligned with all other G7 countries.

  • A tax base that defines income in a manner similar to other “best in class” tax systems and allows a full deduction for ordinary and necessary business expenses. Limitations on interest expense, for example, should follow the international norm of “thin cap” rules rather than an across-the-board disallowance.

MWG can support this.  We have explicitly supported the first two bullets but we don’t link to previous posts.  The third bullet is implied as we have not argued for eliminating the interest deduction.  Can Laura or anyone get bipartisan support for this?  Can she run for president as a Democrat?  As she is at the University of California, could she replace Dianne Feinstein in 2018?

It is a sign of the times that Laura was part of a Democratic administration last century.  We hope she, or somebody like her, will be invited to the next Democratic administration.  It doesn’t seem likely today but JFK was a Democrat.  Jimmy Carter was often serious about economics, especially deregulation.  Bill Clinton, Laura’s boss, had his economic moments.  Things change.  They may change back.

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