On Monday night, more than eighty million Americans watched our two candidates for president argue more about missing tax returns, deleted emails, and a former beauty queen than the issue that matters most to our country’s health and prosperity: economic growth.
When our economy grows rapidly, as it did during the Reagan and (Bill) Clinton administrations, good things happen. Home ownership increases, budget deficits shrink (Mr. Clinton produced a surplus his last four years), crime drops, and America’s influence increases worldwide. Unfortunately, our gross domestic product hasn’t grown more than four percent a year since the end of the last century, and I don’t see it topping that critical figure again anytime soon.
If you missed Tim Cook’s interview on 60 Minutes on Sunday, watch how fired up the normally serene CEO gets when Charlie Rose asks him about the billions Apple is keeping overseas (email subscribers can find the video here):
I don’t blame Cook for being angry. I’ve been saying similar things for awhile now. Our corporate tax system is “awful for America.” It would be bad enough if we were growing at a decent, or even somewhat decent rate economically. But in this ‘new normal’ era of slow to no growth, it’s inexcusable.
It’s an election year, and election years bring out so-called wedge issues. This time around, it looks like the big wedge issue will be the minimum wage. Democrats want to push it above $10 an hour. I’m not a fan of government regulation and other burdens on business–like the excessive corporate tax rate–but I do believe Washington has a moral and financial obligation to help entry-level, unskilled, and young workers. Raising the minimum wage helps all three groups. It does something even more important, too:
It’s fashionable these days, especially in my industry, to style oneself as “socially liberal but fiscally conservative.” I might be one of the only hedge fund managers out there who claims the opposite. I tend to be to the right socially, but downright Krugman-esque when it comes to many fiscal issues. I’m passionately pro-immigration. I believe we should have government-funded healthcare. And I want more public spending on infrastructure and education.
I’ll also readily admit that wealthy individualslike me are under-taxed in this country. Businesses are another matter, though. Corporations are not people, and we shouldn’t be taxing them like they are.