Addressing the topic of jobs last week, I urged business professionals to take responsibility for their own careers and professional development; I am a firm believer in individual effort as the key to success in business and in life. However I also recognize that the business community and our government have responsibilities as well. Putting Americans back to work and our economy back on track requires all of us making investments and taking some risk. That is why I think the American Jobs Act is only part of the solution. Investing in America’s physical infrastructure, and putting teachers and emergency responders back to work as the Act proposes, are critical, worthy expenditures. But the jobs saved or created by the Act are concentrated in union and blue collar sectors, which doesn’t address white collar job losses. The Act also contains tax cuts and credits for small businesses and individuals which would be effective immediately, but much of the actual job creation will take 12-18 months or more. It’s a start but we need more.
One topic that has been widely discussed is how to get the trillions of dollars that American companies currently hold offshore back onshore and invested in our economy. This idea seems to be gaining traction and it should. The business community and Congress need to work together to develop a realistic plan. It is popular to demonize corporate America and easy to espouse unyielding, partisan pronouncements on taxes but that doesn’t result in real answers and a continued stalemate helps no one. It isn’t realistic to expect America’s businesses to ignore the favorable tax policies in other jurisdictions and simply agree to pay the much higher current rates, but I also don’t think it’s realistic for anyone to expect rates lowered to 0% with absolutely no conditions on the use of the money.
When the same idea was implemented in 2004 under former President Bush the results were disappointing but that only means it should be implemented more thoughtfully this time, not disregarded entirely. Is there risk involved? Yes, of course; anything worthwhile involves an element of risk and not everything works out perfectly. Our current state of affairs though calls for action and for compromise. Former President Bill Clinton has suggested a 20% rate for profits and a 10% rate on money used to “increase employment in America.” There are also suggestions to tie tax breaks to increases in a company’s employment, wages or investment, and to allocate the new tax revenues for infrastructure projects. A robust discussion would produce other good ideas I’m sure. I am not a fan of government regulations run amok (who is?) but for this idea to produce real economic results, some guidance and regulation will be necessary. President Obama has said he wants to tie any repatriation efforts to broader corporate tax reform (and believe me I am all in favor of tax reform!) but our economy and American workers cannot and should not wait. The President called for quick passage of the American Jobs Act and that call to action should apply to this as well. We need all hands on deck working together to right the economy and ensure smoother sailing for us all.
President and CEO