Wall Street Journal op-ed, Tax Reform Is the Swiftest Path to Growth, by R. Glenn Hubbard (Dean, Columbia Business School):

‘What is tax reform?”

That’s the Jeopardy-like question matching the answer: “The best step the government could take now to promote growth and employment.” The Obama administration has been responding with “What are higher marginal tax rates and more stimulus?” But fundamental tax reform offers three key benefits.

First, reducing marginal tax rates on saving and investment and on work and entrepreneurship will increase capital formation and productivity, raising wages and output.  … Second, tax reform is part of the structural reform the economy needs. … Third, tax reform is a necessary precondition for any serious national discussion of long-term deficit reduction. …

While there are many prototypes for reform to consider, they all share three features. First, broadening the tax base makes possible significant cuts in marginal tax rates. Second, business taxation is reformed to eliminate double taxation of certain types of business investment. Third, the tax code would no longer provide costly incentives for debt financing over equity financing. And if tax reform results in a consumption tax instead of a corporate income tax, depreciation for business investment would be replaced by expensing, thus further stimulating investment.

In our search for growth, investment and jobs, tax reform is the best answer. The Treasury Department is set to offer thoughts for tax reform in the coming months. And the imminent expiration of the 2001 and 2003 tax cuts guarantees a big tax discussion. Let’s hope that in this Final Jeopardy round, the Obama administration remembers the question.