Published in The Fort Worth Business Press on February 13, 2015
By James Thompson
The new 114th Congress offers an opportunity to ease the gridlock and get something accomplished for the American people. In my view, the best way is to focus on smaller pieces of legislation that can generate enough bipartisan support to pass the House and the Senate. The last several years have shown that broad sweeping legislation is too difficult to achieve within Washington’s current political climate.
Three issues are of most interest to me and, I think, other businesspeople: health care, immigration and tax reform. I elaborate on each below.
The Affordable Care Act passed in 2010, but so far nothing is affordable about it for small- and medium-sized businesses like ours. This year alone our company’s health care premiums will increase 18 percent. The ability to manage increases like this is limited for smaller companies, whereas larger corporations have greater resources and more available options. Due to their size, big companies can self-insure and take advantage of larger risk pools that can lower premiums. Small businesses, however, have more limited risk pools to contend with and, therefore, can be subject to higher health care insurance costs. This issue should be fixed as Obamacare doesn’t address it.
The fate of Obamacare may rest with the Supreme Court and its pending decision in King vs. Burwell. Oral arguments start in March with a decision expected in June. In question is whether consumers can receive premium subsidies in states that aren’t operating their own health care exchanges, such as Texas, and instead rely on HealthCare.gov. If the court rules that those subsidies are illegal, then it is likely that millions of Americans will not be able to afford their insurance and the Obamacare system could collapse.
While there are those who would like to see Obamacare go away, many Americans have insurance now because of it. Depriving them of health care coverage could have major consequences for the 2016 elections as those people stranded without insurance will tend to blame the Republicans controlling Congress.
Congress needs to be ready with an alternative plan. That plan should create a more competitive health care insurance marketplace that has a chance of lowering costs. One option is to offer cafeteria-style benefit packages that unbundle the current comprehensive plans so consumers can select and pay for the coverage that suits their individual needs.
Broad immigration reform that addresses a path to citizenship and border security is highly contentious. The chances are slim that bipartisan support can be generated for it this year. Instead, Congress should focus on smaller, more targeted pieces of legislation which have a chance of becoming law. By accomplishing something one step at a time, the immigration issue can be addressed incrementally. Two such steps will help businesses immediately, which will result in more American investment and jobs.
The first is to raise the H1B visa quotas for skilled labor, which will help our economy remain competitive with countries that are creating opportunities faster than we are. I’ve advocated for this for a long time.
The second step is to pass the StartUp Visa Act, which has languished in Congress since 2011. It would create an immigrant visa for entrepreneurs who have the required level of financial backing and can demonstrate that their new ventures will generate a certain amount of employment, revenue or capital investment. This is legislation that should be passed in order to allow thousands of non-citizens, who are most likely educated in American universities, to stay in this country and continue to contribute to our economy.
The United States has the highest corporate tax rate among industrialized nations – 39.1 percent. This is a competitive disadvantage for U.S. businesses and our economy overall. Why invest here when it’s cheaper to do so in other countries?
Both sides of the aisle have expressed interest in tax reform. Congress should start by lowering the overall corporate rate so U.S. businesses can be more competitive; 28 percent is a target rate often cited as realistic, of course with the commensurate closing of loopholes and tax breaks originally put in place to please special interests.
A more competitive corporate tax rate would also be a step toward addressing the repatriation issue, which gives multinational companies an incentive to park cash overseas, where it is taxed at a lower rate. The current system taxes that money again when it is moved back to the United States. This double taxation should be corrected. Congress needs to move toward a simpler tax code to avoid the morass of tax breaks and loopholes creating unfair advantages for certain businesses and industries. Let the marketplace decide the winners without artificial means.
Members of Congress, you need to govern. It isn’t enough to just be in opposition to an issue. It is a political given that you won’t get everything you want. Instead, find pieces of legislation that are actionable and get something accomplished. This will do more than just address health care, immigration and tax reform. It will boost the overall economy and improve hiring in the United States as business people will feel more confident in the future because of the action and leadership demonstrated by our elected federal representatives. Get to work because we’re watching.