Sen. Ted Cruz, R-Texas, argued Wednesday that economic growth generated by lower taxes is the key to achieving other GOP objectives, including reducing the debt and rebuilding the military.
“If you care about the national debt, if you care about the deficit, if you care about rebuilding and strengthening our military, if you care about strengthening and improving Social Security and Medicare so they are there for the next generations, you’ve got to have growth,” Cruz said on the Senate floor.
“With economic growth, every one of those is possible,” he said. “Without growth, if we stay mired in the stagnant Obama 1 and 2 percent GDP growth, none of those problems are solvable.”
Cruz and other Republicans say their pending plan to reduce taxes across the board would help push growth above 3 percent per year. While lower taxes would reduce federal tax revenues in the short term, Republicans say it would eventually boost revenues as the lower tax rates promote business growth.
Most economists say lower tax rates won’t completely “pay for themselves” by creating so much growth that the government receives more revenues. But the GOP has said the U.S. needs to push the U.S. economy to its potential.
House Speaker Paul Ryan argued before Cruz spoke that he is moving quickly on a budget and tax bill because of the need to get to 3 percent growth again.
“We’re sort of limping along, growing between 1 and 2 percent, and that is so far underneath our potential as a country,” Ryan said.
Cruz said on the floor that economic growth is the most important piece of tax reform, and said the new tax system must be simple, and must be fair by lowering everyone taxes.
Cruz also outlined seven elements he wants to see in the GOP’s tax plan. Those elements are cutting the number of rates, the ability to file on a postcard, immediate expensing for businesses, lower corporate rates, lower taxes on repatriated capital, ending the death tax, and ending the alternative minimum tax.
