Finally, we must completely revamp the U.S. tax system and
move to a territorial model that does not tax foreign source
income. U.S. corporations are sitting on more than a
trillion dollars in foreign earnings that cannot be
repatriated to the U.S. because of taxes. We need to stop
taxing unpatriated funds to bring those earnings home.
Better yet, we need to abolish the income tax altogether.
The U.S. economy is in
deep trouble. Congress needs to act immediately to restore
the rule of law and create an environment that rewards,
rather than punishes, the critical components of any healthy
economy: capital accumulation and investment.
In this struggling
economy it is essential for politicians to take a step back
and think about what government has been doing to business
in this country. In less than 200 years, the free market,
property rights, and respect for the rule of law took this
nation from a rough frontier to a global economic superpower.
Today, however, our nation and our economy clearly are
headed in the wrong direction.
Of course, America has
never enjoyed absolute free-market capitalism: creeping
government intrusion and special interest political
patronage have existed and increased since our founding. But
America historically has permitted free markets to operate
with less government interference than other nations, while
showing greater respect for property rights and the rule of
law. Less government, respect for private property, and a
relatively stable legal environment allowed America to
become the wealthiest nation on earth.
By contrast, the poorest
nations almost always demonstrate hostility for free markets,
private property, and the rule of law. Capital formation,
entrepreneurship, credit, and wealth accumulation are
uniformly discouraged in poor countries. Private contracts
are not reliably enforced, and private property is not
secure in the hands of owners. The predictable result is
widespread poverty and misery.