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Thursday, October 25, 2012

Some CEOs call for tax reform that includes raising revenues

Federal Debt information from OMB (dollars in millions)
The Wall Street Journal reports today (10/25/12) that over 80 CEOs are calling for increased revenues and tax reform to address the problems associated with our large federal debt ("CEOs Call for Deficit Action"). Here is an excerpt from the letter:

"The plan should: ... Include comprehensive and pro-growth tax reform, which broadens the base, lowers rates, raises revenues and reduces the deficit."

The CEOs also call for reforms to Medicare and Social Security, consideration of the Simpson-Bowles Commission recommendations, and actions that are "conducive to long-term economic growth."

The CEOs also note: "Policy makers should acknowledge that our growing debt is a serious threat to the economic well-being and security of the United States."

I think the CEOs are exercising important social responsibility by mentioning that tax reform should be broad (including fixing problems in Social Security and Medicare) and that the tax reform we hear both parties talk about (lowering rates and broadening the base) must also raise revenues to pay down the debt.

The growing debt means greater mandatory interest expense payments for the federal government. It can also lead to increased interest rates for all borrowers as the federal borrowing reduces the supply of funds for lending.

The Simpson-Bowles Commission, officially known as the National Commission on Fiscal Responsibility and Reform, is the bipartisan group formed by President Obama in February 2010 that issued a report in December 2010.

The CEO action is part of a new initiative of the Committee for a Responsible Federal Budget called Fix the Debt. You can sign their petition at that site if you wish (I signed it).

What do you think about the CEO statement?

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