The second big problem is the federal budget, where the level of debt (relative to GDP) is historically high and the Congressional Budget Office (CBO) projects another $20 trillion in federal deficits over the next 10 years. The two problems are interrelated, as the deficits crowd out private investment and slow the pace of growth. Finally, the slower pace of growth and lower GDP mean that revenues are about $12 trillion less (over the next 10 years) than they otherwise would have been.

This brings us to the fate of the Tax Cuts and Jobs Act (TCJA) of 2017, a huge portion of which will sunset in 2025. Making all the provisions permanent is estimated to increase deficits by a bit over $3 trillion over 10 years. Given the fiscal outlook, one will hear many calls to simply let the TCJA expire. But given the weak trend growth, is a tax increase of $3 trillion really a good idea?

The solution is to neither let the TCJA expire nor extend it permanently. The solution is to take the 2025 deadline as the opportunity to continue the pro-growth tax reforms begun in 2017. As a general matter, tax reform is the process of keeping rates as low as possible and the base as broad as feasible. Pro-growth tax reform means that the base should be as close to aggregate consumption as possible, while the taxes on the return to saving, investment, and innovation should be as low as possible. Finally, in the interest of efficiency, the tax code should be as neutral as possible between debt- and equity-financed investment; investments in human, physical, and technology capital; and between activity in the corporate and non-corporate sector.

In practice, this means that there should be no contemplation of raising the corporate rate as it is among the most successful parts of the reform. In the decade prior to the TCJA, the United States lost roughly 10 headquarters every year. Since then? None. Could there be improvements in the corporate reforms? Of course, but the basic structure works. Similarly, should there be a way to equalize the tax treatments of corporate-source income and pass-through business income? Yes, but there is nothing sacred about the approach in the TCJA, which could be strengthened.

The future of the TCJA is a central feature of the future policy debate. But it should not be a discussion focused on soak-the-rich, hammer-the-corporations, or eat-your-fiscal-spinach rhetoric. The United States needs strong, pro-growth tax reform.