This was a post on the Doing What Works project’s competitiveness blog.
I commend the Center for American Progress for its focus on developing a coherent and inclusive competitiveness strategy. It’s an especially important topic now because real traction in terms of jobs and top-line growth continues to be difficult, and because countries around the world are competing more aggressively than ever for capital and jobs.
There’s obviously much to do, and everyone has an important role to play. From my perspective, our long-term success depends on our ability to bend the curve in two key areas: education and investment.
By 2020, according to one estimate, close to three-quarters of all U.S. jobs will require advanced skills—and too few Americans will be prepared for these jobs judging by current graduation rates. This is a tragedy for many of our young people, and it’s a real threat to our country’s global competitiveness
Fortunately, President Barack Obama and his administration have made education a real priority with initiatives such as Race to the Top and Investing in Innovation. Philanthropic organizations and companies, including my own, have also sharpened their focus on education. It’s important that we succeed. To compete in a global economy, we have to reverse the high school dropout crisis and help students gain the skills they need for the decades ahead.
We must also create a better environment for private-sector investment and job creation here at home. Historically, it has been the private sector—businesses and entrepreneurs willing to take risks and invest in new ideas—that has driven U.S. employment and economic expansion.
A focus on capital investment is synonymous with a focus on jobs. And there are some basic, near-term steps we can take now to build a framework where this kind of sustainable investment can thrive.
One is to minimize taxes on capital gains and dividends. The world’s capital is fungible. It flows to the highest returns. If U.S. taxes on investment are too high, capital will simply flow to a lower-cost alternative. And increasing taxes on investment will mechanically translate to less investment.
Today, the United States taxes corporations at 39.2 percent, while the average for the OECD countries is significantly lower at 25.3 percent. These taxes on investment and businesses create hurdles for individuals looking to start a small business or companies looking to build new U.S. facilities. In the end, American workers pay the price.
Another near-term step is to reduce unnecessary regulatory burdens, which chill investment and job creation. To be sure, in some problematic areas, the case for new oversight may be persuasive. But in far too many areas, imagined problems and hypothetical abuses have become a rationale for government regulatory intrusion. We have to get the mix right here.
Ultimately, to get America’s economic engine moving again we must focus on both long-term challenges like education and on urgent near-term tasks like taxes and regulation. Done right, we can create a favorable, sustainable climate for investment, jobs, growth, and, ultimately, for U.S. competitiveness.
Randall Stephenson is chairman, chief executive officer, and president of AT&T.
This was a post on the Doing What Works project’s competitiveness blog.
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