The State of Our Union – Action Needed
In his State of the Union address, President Barack Obama outlined an ambitious agenda to overhaul the U.S. tax code, produce more domestic and alternative energy, rebuild our infrastructure and expand international trade.
This endeavor must start with the long overdue task of restructuring the corporate tax code, stuck at 39 percent for far too long (35% federal + 4% state) and putting American companies at a competitive disadvantage versus our economic peers. Washington should build on the momentum from earlier this year when policymakers addressed individual tax rates. As the President correctly noted, this will not be easy. However to create more jobs, it is imperative that we create an environment that encourages investment and a 39 percent corporate tax is not the answer. This fix must be a part of any reform package.
On the issue of energy, the President endorsed a key priority of FedEx Chairman Fred Smith and the Securing America’s Future Energy organization – creating an Energy Security Trust Fund to support research and development to end U.S. dependence on foreign sources of energy. The U.S. transportation sector is responsible for some 70 percent of fuel demand, which is far too high. While the United States must find more domestic sources of oil, we have to find workable alternatives too. The FedEx team has been working hard to introduce alternative energy vehicles as part of our fleet and we have pressed for a national strategy for energy security so that we have a vibrant economy and reduce our reliance on foreign oil.
Alongside a more efficient transportation fleet, the country needs to upgrade and modernize our infrastructure. The President’s “Fix It First” Program is a good step towards fixing our roads and bridges that are the backbone of our economy. Further on the infrastructure front, we must have close public-private collaboration to protect other parts of our critical infrastructure from cyber and hacking threats – whether it’s our air traffic control system, the energy grid or our computer networks with important intellectual property.
I was also encouraged by the President’s comments on free trade, including plans to wrap up negotiations for a treaty with nearly a dozen Asia-Pacific and North American partners, which represents some 40 percent of global trade. Further, clinching a new free trade pact with one of our biggest and most important partners, the European Union, would be a further boost to our economy. The Chamber of Commerce estimates that more than 38 million American jobs depend on trade.