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Reform the corporate tax system

The System is clearly broken. Alan Viard and Eric Toder: "At roughly 39% (including state taxes), the
U.S. corporate tax rate is the highest among developed countries. Also, the United States is one of the
few countries still taxing the active foreign-source income of its corporations. These features of the
corporate tax discourage investment in the United States, encourage U.S. multinationals to retain profits
overseas, and may place U.S. companies at a disadvantage compared with their foreign competitors,
giving our companies an incentive to change their corporate residence."

Better yet, end the corporate income tax completely. James Pethokoukis: "The corporate income tax
is so harmful that we should just get rid of it. That would really help America's struggling middle class.
Economic modeling conducted by Boston University economist Laurence Kotlikoff finds 'a very strong,
worker-based case' for swinging the ax. Fully eliminating the corporate income tax, he writes, would
cause 'rapid and dramatic increases' in U.S. investment, output, and real wages. More investment means
more jobs, higher productivity, and higher wages."

Interviews with AEI scholars on upward mobility and opportunity

Q&A with Robert Doar on reducing poverty. Robert Doar: "Americans will support programs that help
people who are trying to get into employment or are working but at low wages. They are not comfortable
with supporting programs that don't move people toward employment and a lot of our assistance
programs are not doing that right now and they need to be."

Q&A with Aparna Mathur on helping African American single mothers. Aparna Mathur: "While single
mothers fare worse in the labor market than married mothers, I think the solution to improving economic
mobility begins before you enter the labor market. The strongest predictor of high mobility is investments
in education -- completing high school, going to college or technical or vocational school. That is key."

Dear politicians: Stop pretending to be poor. Kevin Corinth: "Apparently believing that it's too difficult
to find one of the almost 50 million Americans living in poverty, some politicians are attempting to learn
about poverty by trying it out for themselves. The reports of their experiences are pouring in with tweets of
planned food purchases, 60-minute poverty simulations, and video documentaries of life on the street."

ICYMI -- Poverty in America -- and What to Do About It

Where is economic growth?

Response to S&P's assertion that income inequality is 'dampening' US growth. James Pethokoukis:
"S&P blames rising income inequality for reducing social mobility. Bovini: 'Aside from the extreme
economic swings, such income imbalances tend to dampen social mobility and produce a less-educated
workforce that can't compete in a changing global economy.' I would refer Bovini to a study from the
Equality of Opportunity Project, which found US mobility has changed little in nearly half a century."

Little-known FRED charts reveal the state of the economy. Michael Strain: "This chart tells you quite
a bit of information. It plots the ratio of the level of unemployment and the level of job openings -- in other
words, it reports how many job seekers there are for every job opening. As you can see, things got pretty
bad at the height of the Great Recession, with nearly seven job-seeking unemployed workers for every
job opening."

The Fed's impending exit poses significant economic challenges. John Makin: "We need to admit
that we still don't know how to exit the extreme monetary accommodation required to avoid a financial
and economic collapse after a crisis like that which hit the US financial market in September 2008."

The biggest risks are not the ones we cannot see. Alex Pollock: "The real problem is not 'overseeing'
the risks of the future, it is seeing them -- or more precisely, imagining them. Committees and
bureaucracies are not notably good at this."

In other news

Big bank resolution process is not yet viable. Paul Kupiec: "The Dodd-Frank mandate for large
financial institutions to file annual Orderly Resolution Plans has been a total wasted effort. Aside from the
fact that these plans are not credible, the real systemic risk issue is not bankruptcy, but the broken FDIC
resolution process for large banks."

Currency critics are stuck in the past. Derek Scissors: "There is a vocal group insisting that the U.S.
must act to prevent Japanese currency manipulation. They want to include a currency chapter in the TPP,
which includes Japan. Such a chapter will not materially help our economy and may end up hurting a
good deal."

Mark your calendar

8.12 AEI EVENT featuring Newt Gingrich: Veterans and their smartphones: Creating a 21st-century
veterans service system
8.14 Weekly jobless claims released

Keep up with AEIecon

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Read more from the American Enterprise Institute economic policy team at
www.aei.org/policy/economics.
Contact Abby at abby.mccloskey@aei.org if you have questions for the economics team.

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