Pro-con: Does U.S. need increased tax revenue?

America’s economy is poised to roar ahead if only Washington would stop holding it back. Ever since the Great Recession officially ended, the private sector has been adding jobs. What’s kept the economy in low gear and the unemployment rate stubbornly high has been the shrinking of government workforces: cops, teachers and other valuable public employees let go in the face of inadequate tax revenue. What fiscal policy should Washington adopt to boost our economy rather than drag it down? The first thing is to acknowledge that our current debt-reduction efforts can’t be primarily focused on spending reductions. We can’t cut our way out of debt, especially if we want to support our economy at the same time. We need a balanced approach of thoughtful spending curbs and increased revenue. If we don’t want to go deeper in debt, we need sufficient tax revenue from those best able to supply it to support job-creating federal investment in our still-struggling economy. – William Rice, Americans for Democratic Action

Even though economic growth is what we badly need to hasten our recovery, many of our leaders in Washington are hungry for even more tax revenue. Some still champion a big-government agenda that requires greater resources to implement more programs. But a heavy tax burden means consumers have less of their income to spend in the economy and businesses have less for hiring, expansion and investment. So when taxes go up, the rate of economic growth goes down. In order to keep our economy humming and put the government back on sound fiscal footing, we must undertake comprehensive tax reform and exercise real spending restraint through fundamental entitlement reform. Comprehensive tax reform should broaden the tax base so more people are paying into the system and simplify compliance for all business entities. It is the responsibility of the business community to keep the pressure on. Let’s remind Congress and the administration that, when families and employers fall on hard financial times, they must make tough decisions. It’s time for Washington to follow suit. – Martin A. Regalia, U.S. Chamber of Commerce