Within the next 24 hours, the United States will have a new president (barring another hanging chad type situation). No matter which major-party candidate wins, our new president will be the most unpopular new commander in chief ever; polls show majorities of the American people hold unfavorable views of both candidates.
So when our new president is sworn in, he or she will take on the task of leading a nation both sharply divided and deeply disgusted. How to begin the process of healing wounds and moving the country forward in a positive direction? Here are three policy changes that can improve both the new president’s public image and U.S. economic performance, and which have—or should have at the very least—bi-partisan support.
Reform the Corporate Tax Code
The U.S. has the third-highest corporate tax rate in the world, behind only the United Arab Emirates and Puerto Rico. Our corporate tax rate is the highest among “the 35 industrialized nations of the Organisation for Economic Co-operation and Development (OECD)” according to The Tax Foundation.
Yet accounting gimmicks and loopholes enable dozens of the largest, most profitable companies in the country pay no federal taxes whatsoever.
The result is that small and midsize firms face an outsized tax burden that makes it difficult to grow and compete internationally, while some corporate giants pay little or nothing. U.S. workers and consumers lose on both counts, paying higher prices and taxes while earning lower wages than would otherwise be possible.
The answer isn’t difficult: close the loopholes, but lower the tax rate. The net effect on total federal tax receipts will be minimal, but workers, consumers, and small business owners will benefit. Larger companies will have fewer tax breaks but also less incentive to pursue them. This isn’t a partisan issue. It presents a prime opportunity for the new president to bring Democrats and Republicans together to do something to help the economy and begin to build post-election goodwill.
Eliminate Barriers to Repatriating Foreign Earnings
U.S. corporations have roughly $2 trillion in earnings trapped in foreign holdings, because we are the only developed nation that taxes businesses on the income of foreign subsidiaries earned abroad.
While Democrats and Republicans disagree on precisely what to do about this, they do agree that incentivizing companies to bring that money back home would benefit our economy, but a tax holiday (as we tried in 2004) is the wrong way to do it: the money won’t necessarily be reinvested in productive assets, and it actually encourages large multinational businesses to leave more of their earnings parked overseas, in anticipation of the next tax holiday.
The Brookings Institution has outlined a plan combining the approach favored by Republicans with ideas from President Obama. It may or may not be the ideal answer, but the fact such policy recommendations exist show it’s possible for the two sides to work together on the issue.
Increase National Investments in Cyber Security
Depending on your political leanings, you may believe that Hillary Clinton made an error in judgment in setting up a private email server, or that she is deeply corrupt. Regardless of the outcome of the election, the American people deserve to know all the facts. But getting those facts through Wikileaks releases from hackers is flat out the wrong way. Whatever one’s political leanings, efforts by foreign governments and other shadowy cyber criminals to meddle in our election ought to be profoundly disturbing.
The damage from hacking goes far beyond politics, of course. The global cost of cyber crime topped $500 billion in 2015, and is projected to quadruple to more than $2 trillion by 2019, according to Forbes.
More ominously, some top U.S. intelligence officials view cyber attacks as the biggest threat to national security. And cyber warfare is far less expensive to wage than conventional battle. Even small nations or terrorist groups who could never come close to matching the ground, air, or sea capabilities of our military could potentially inflict serious damage to our infrastructure through cyber means.
Given the magnitude of the threat, politicians of all stripes should be able to agree on making this a priority.
Working with congress to take bipartisan action on these three issues would help to heal the wounds left by one of the nastiest presidential campaigns in U.S. history, enhance acceptance of the victor, enhance our national security, and improve America’s economic performance.
Sadly, none of this is likely to happen. A president Trump would conceivably be marginalized by both parties, while a president Clinton will struggle under a lingering cloud of ethical and legal suspicion.
Two things are certain. The citizens of U.S.—and the rest of the world—deserve better. And in less than 24 hours, we’ll know what we’re going to get.