5 ways to get the American Dream Back
The following is excerpted and adapted from Who Stole the American Dream? by Hedrick Smith.
Over the past three decades, we have fallen from being the envy of the world, with the most affluent middle class of any place on Earth, to losing our title as “the land of opportunity.” The excessive influence of business over politics and policy has put the American middle class in an ever-tightening financial squeeze, dramatically increasing inequality and brought us to the end of what we can rightly call a Democracy.
Restoring the American Dream will not be quick or simple. We have a long-term structural jobs problem that demands new thinking and an ambitious new economic agenda.
Here are 10 steps Hedrick Smith proposes for reclaiming the American Dream:
Step 1: Infrastructure Jobs to Compete Better A new public-private partnership to modernize America’s outdated transportation networks could create 5 million jobs — and maybe many more — with major investments over the next decade.
Not only do we have 69,000 structurally deficient bridges, but our national rail network has such serious bottlenecks that it takes a freight train longer to get through the city of Chicago than it does to go from Chicago to Los Angeles. Our aviation control system is so outdated and overloaded that the Federal Aviation Administration predicts it “will reach total gridlock by 2015” unless it is urgently modernized. Our ports are overloaded and our highways are clogged.
Step 2: Push Innovation, Science and High-Tech Research
It’s time for a major new national commitment to rebuild America’s capacity to out-invent and out-innovate the world.
Despite breakthroughs by such companies as Apple and Google, the United States has slipped in innovation, which has long been America’s bedrock advantage in the world.
Scientists, educators and corporate leaders support the National Academy of Sciences’ finding that it will take dramatically expanded government financing for the United States to bounce back in the R&D race.
Step 3: Generate a Manufacturing Renaissance
From 2001 to 2011, U.S. employment in manufacturing fell from 17.2 million to 11.7 million and more than 59,000 factories were shut down. The damage was even wider because of the ripple effect. Each job lost in manufacturing cut 2.5 other jobs in the rest of the economy.
A manufacturing renaissance is essential to America’s economic growth, but it is a tough challenge. Rebuilding our industrial base means being sharp enough to convert American innovations into American-based production for U.S. jobs and that requires new government initiatives and public-private partnerships.
One major change in government policy — and in the actions of American consumers — could bolster U.S. manufacturing: Buy American. Many in business urge that state and federal governments tighten the “Buy American” requirements for government contracts, consistent with U.S. trade agreements.
Step 4: Make the Income Tax Code Fairer
The U.S. income tax code must be rebalanced to reduce its heavy tilt in favor of the super-rich.
Simplifying the tax code will make it easier to enforce. So many exotic tax shelters have been invented by ingenious tax lawyers and accountants to reduce the taxes of the super-rich that former IRS commissioner Charles Rossotti, a Republican businessman, estimated the tax loss to illegitimate tax evasions at $250 billion to $350 billion a year. As a result, honest taxpayers have to pay 15 percent more in their taxes.
The simplest, broadest tax reform to achieve a more level economic playing field would be to end the low 15 percent capital gains tax rate and to tax investment gains at the same rate as wages and salaries.
Step 5: Fix the Corporate Tax Code
Lowering the corporate tax rate and closing loopholes would discourage U.S. firms from offshoring jobs and reward companies that hire at home.
While the U.S. corporate tax rate is one of the highest in the world, most U.S. multinationals pay far less than the official 35 percent rate. Ones with large overseas operations often pay very low U.S. taxes or none at all.