The U.S. needs to invest in middle-class tax cuts, restore its infrastructure and approve sweeping foreign trade agreements with Asia and Europe, Secretary of Commerce Penny Pritzker said Wednesday at a forum in Charlotte.
Pritzker, speaking a day after President Barack Obama’s State of the Union address, also said a proposal by the administration to tax large financial institutions makes sense in the context of corporate tax reform, which could lower overall rates. Financial institutions oppose the idea, which they say could hurt economic growth.
Republicans in Congress have said much of the president’s agenda, such as the proposed bank tax and tax increases on capital gains for the wealthy, would damage the economy and won’t pass. But Pritzker said Wednesday she believes there’s better than a 50 percent chance that tax reform could go through, if the administration and Republicans are able to strike a bargain.
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Pritzker became Commerce Secretary in 2013. Her family built the Hyatt hotel chain, and Pritzker is a former Hyatt executive and serial entrepreneur with a Forbes-estimated net worth of $2.5 billion.
Here’s what she told the Observer in an interview before a forum at UNC Charlotte’s uptown campus, sponsored by the Charlotte Chamber. Answers have been edited for length.
On the overall economy
We finished 2014 in a really strong place. We have a lot of momentum coming into 2015. Job growth is the strongest it’s been since the 1990s. Gross domestic product in the third quarter was up 5 percent. The economic fundamentals are really strong in America. But the president also points out that incomes are not rising and the middle class is not expanding.
On bringing the middle class up
There’s no one solution. First is jobs. The more jobs, the more people are employed, the more opportunity for wages to rise. The second is to make sure Americans are prepared for jobs of the 21st century. You heard the president talk about making sure we train a skilled workforce. That’s a spectrum of jobs – everything from manufacturing to high-end (science, technology and mathematics) jobs. Free community college if you earn it, by good attendance and good grades.
On corporate tax reform
We need to do business tax reform. We have the highest corporate tax rate in the world. That makes our companies not competitive. The president is saying ‘I’m open to addressing this but not on the backs of individuals.’ We have to make this revenue-neutral, which means you’re going to remove certain deductions to get a lower tax rate for businesses. But the opportunity is to keep us more competitive
On a proposed tax on large banks that could raise $110 billion worth of revenue
(Obama has proposed a 0.07 percent fee on liabilities at financial institutions with more than $50 billion worth of assets.) I think that what the president is proposing is if you were to lower the business tax rate, the financial services industry would get a big benefit. And he’s saying let’s take some of that benefit and use it to help the middle class. What the president’s trying to do is find a balance here. In order for our recovery to be sustainable and durable we have to make sure we have a growing middle class, and a growing consumer class.
On infrastructure needs
We have to invest in infrastructure. We’ve got over $2 trillion of deferred investment in infrastructure. We’ve gone from being No. 7 in roads by the World Economic Forum to No. 18.
We need to invest in broadband. We need more access. That’s important for education, schools, continuous learning. It’s also important for innovation, it’s important for business.