The U.S. Department of Labor stated in the late 1800s that Labor Day was established to celebrate the “strength and spirit of the trade and labor organizations.” Unfortunately, true Labor Day celebrations have taken a back seat to the mere enjoyment of a three-day weekend.
Perhaps this year it’s a little different. With the unemployment rate at nearly double what it was four short years ago, the reality is that fewer people will be taking a break from rewarding work and more will be trying simply to take their minds off another fruitless week searching for jobs that don’t exist.
Is the dream of the American worker alive today? It is a fair question both this weekend and this year as our country considers the solutions to the challenges putting our country in crisis.
Stimulus, bailouts, TARP and Obamacare are just a few of the commonly used terms of economic promise repeated by our country’s current political leadership. All these efforts have failed to spark our economy and have resulted in the same outcome: more money taken from family budgets to fuel expanding government.
There are three immediate steps we must take to get our country working again: create a competitive tax rate, repatriate foreign profits for investment at home and remove the regulations that prevent us from becoming energy-independent.
Our country’s corporate tax rate is no longer competitive, topping out at an embarrassingly high 35 percent. Comparably, Ireland — a booming reincorporation destination for U.S. companies — offers a top rate of 12.5 percent. Our current corporate tax structure doesn’t serve as a welcome mat for job creators, but rather a moving truck.
Currently, foreign profits are taxed at upward of a 35 percent rate if brought back into the United States. Rather than pay this exorbitant rate for money made overseas, countless companies choose to leave the money invested on foreign soil. We must finally address the perverse incentives that cause companies to reinvest foreign profits oversees rather than repatriating those profits.
According to recent news reports, Apple, Microsoft and Google are calling for federal tax incentives to repatriate, by conservative estimates, up to $1 trillion in foreign profits generated by U.S. corporations. Rather than a mere tax holiday or other temporary measure, I propose a permanent solution to return those foreign profits for investment in the United States.
I suggest a policy of zero taxation on foreign profits repatriated to the United States when those profits are used for investment in plant and equipment, job training or research and development. Investing more than $1 trillion in our economy at little or no cost to the U.S. Treasury (because those profits generally are not taxed now) is one of the most powerful near-term actions we can take to restore America’s economy and get our country working again.
Each time we fill our gas tanks is a painful reminder of our dependency on foreign oil. By taking measured and careful advantage of our nation’s vast natural resources, we finally can achieve energy independence while growing our own economy. Energy independence would mean creating millions of jobs and lowering energy costs for families while breaking the chain of dependency when it comes to foreign oil. It is estimated that fully realizing our nation’s energy potential by 2020 would add $624 billion to our country’s gross domestic product.
As we celebrate Labor Day, think about the estimated 3.6 million new jobs, one-third of them in manufacturing, a commitment to energy independence would deliver. We can talk about government jobs programs or bailouts of existing industries, but the reality is that nothing on the table right now could do more to impact the American economy than embracing energy independence.
Labor Day is not only a reminder of the success of the past, but also a chance to consider the opportunity of tomorrow. It is an opportunity to provide an emphatic answer to the question, “Is the dream of the American worker alive today?”
I believe not only that the dream of the American worker is alive but that with the right policies and politicians enacting them, we can usher in a new era of job expansion and American prosperity.
Tommy Thompson, a candidate for the U.S. Senate, was governor of Wisconsin and secretary of health and human services during the George W. Bush administration.