We mustn’t miss the chance to boost the Amer­i­can econ­omy, say John Stephens and Betty Manetta

The Dallas Morning News - - Viewpoints - John Stephens is chief fi­nan­cial of­fi­cer of AT&T Inc. Betty Manetta is chief ex­ec­u­tive of Ar­gent As­so­ci­ates Inc. They wrote this col­umn for The Dal­las Morn­ing

The Amer­i­can econ­omy, long the world’s largest and most dy­namic, is in a rut. Since 2010, real gross do­mes­tic prod­uct growth has av­er­aged an ane­mic 2 per­cent, well be­low his­toric norms.

And here’s why that mat­ters: As the Amer­i­can econ­omy goes, so goes Amer­i­can busi­ness — whether big or small. The logic is pretty straight­for­ward. When the econ­omy is weak, com­pa­nies don’t in­vest or hire as much as they do when eco­nomic growth is strong.

So, it’s no sur­prise that pri­vate sec­tor in­vest­ment, one of the best in­di­ca­tors of eco­nomic strength and a key driver of growth, is at lows not seen in gen­er­a­tions.

It doesn’t have to be this way. Ro­bust eco­nomic growth is one of the few things that ev­ery­one sup­ports, re­gard­less of po­lit­i­cal per­sua­sion. So how do we get there?

The main driver of that growth is pri­vate sec­tor in­vest­ment. And the best way to in­crease pri­vate sec­tor in­vest­ment is to make Amer­ica’s busi­ness tax rate com­pet­i­tive.

It has been three decades since the tax code has been sig­nif­i­cantly up­dated. Since then, most other de­vel­oped coun­tries have low­ered their busi­ness tax rates, at­tract­ing in­vest­ment and job growth, while the U.S. has stayed on the side­lines. And the re­sult? The U.S. busi­ness tax rate is no longer com­pet­i­tive, with the high­est rate among in­dus­tri­al­ized economies in the world. For large and small com­pa­nies alike, this drives down in­vest­ment and pushes jobs over­seas.

We have a once-in-a-gen­er­a­tion op­por­tu­nity to com­pre­hen­sively ad­dress this com­pet­i­tive im­bal­ance. Mod­ern­iz­ing our busi­ness tax laws will help un­leash the full power of Amer­i­can ideas and in­dus­try.

Here’s one ex­am­ple: AT&T al­ready in­vests more in the U.S. than any other pub­lic com­pany, more than $135 bil­lion since 2012, in­clud­ing wire­less and spec­trum ac­qui­si­tions. But if Wash­ing­ton re­forms the busi­ness tax rate, we would be able to in­vest even more in our net­works and ca­pa­bil­i­ties. That cre­ates good-pay­ing jobs, 7,000 for ev­ery ad­di­tional $1 bil­lion we spend, as it flows into the broader econ­omy.

A case in point is Ar­gent As­so­ci­ates, an in­te­gra­tion and sup­ply chain-com­pany based in Plano. Ar­gent sup­plies AT&T with test­ing, in­stal­la­tion and lo­gis­ti­cal sup­port ser­vices for the net­work in­fra­struc­ture, as it does for many other com­pa­nies. And when Ar­gent’s busi­ness cus­tomers have more cap­i­tal to spend with them, Ar­gent in turn has more re­sources to in­vest in jobs, wages and growth. More GDP growth leads to higher busi­ness in­vest­ment, which leads to higher de­mand for prod­ucts and ser­vices, which leads to more jobs. And so it goes, a clas­sic vir­tu­ous cir­cle.

Even mod­est busi­ness tax re­form would have a pos­i­tive im­pact, boost­ing wages and growth.

Ev­ery month the United States goes with­out re­form­ing its out­dated busi­ness tax code is an­other month of missed op­por­tu­nity and stunted eco­nomic growth.

We ap­plaud pol­i­cy­mak­ers in Wash­ing­ton for be­gin­ning the long-over­due process of re­form. The well-be­ing of our fam­i­lies and com­mu­ni­ties de­pends on it. For their sake, we can‘t af­ford to let this op­por­tu­nity go to waste.


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