One of the principal policy goals of President Trump's administration is tax reform to create greater economic growth. Under former President Barack Obama, growth was very slow, finally settling into a "new normal" of 2 percent growth, or less. The Left seems satisfied with the slow growth rate.
The voices of the Left deride the idea of economic growth, even condemning the idea of trying to grow the economy. Ali Velshi on MSNBC ridiculed the idea of vigorous growth, the completely bald Velshi saying that "he has a better chance of growing a full, thick afro than the U.S. economy growing 4 percent, 5 percent, 6 percent."
Stephanie Ruhle, also on MSNBC on May 26, said growing the U.S. economy is "pie in the sky."
Maybe the Left just doesn't want anyone to do better than the failed economic policies of the Obama administration. But at the American Opportunity/Free Congress Foundation, we say "Yes we can!" In fact, economic growth of 3.2 percent is the norm in the United States, and our goal should be do better than that average.
A few facts you need to know. The historical average growth rate since the beginning of our country is 3.2 percent. This is the standard. If you exceed that rate, you are picking up ground. If you fall below, you are losing ground.
The Great Recession of 2008-2010 has created lower expectations for economic growth. To get back to the norm, we must grow more than 3.2 percent, or forever give up the economic growth we would have had but for the recession.
Usually the growth rate of the U.S. picks up as we come out of a recession, and exceeds 3.2 percent as we return to the norm. This never happened during the Obama years. Even now, without passage of a tax reform, the growth rate of the first quarter of 2017 is only 1.4 percent.
U.S. GDP is about $18.5 trillion. It is expected to rise to about $19 trillion in 2017. In contrast, the next largest GDP is China's at about $11 trillion. Russia's GDP is about $1.4 trillion. This economic power is what makes us a country that should be listened to, allows us to protect our citizens and allies, makes us a trading giant, and enables us to extend freedom and values of decency.
Since 2010, we at the American Opportunity/Free Congress Foundation have been promoting The Growth Code. Today, Congress and the Trump administration are considering tax reform. This is the time for us to again assert that the mission of the tax reform, indeed the national mission of the government, needs to be aggressive economic growth.
There has been much debate for and against a border adjustment tax to encourage domestic manufacturing, reduce imports, and foster exports. Another path is available: enact at least two elements of the Growth Code, such as immediate expensing of business equipment and investment or an equal tax rate for all businesses, small and large, at 15 percent.
Our tax on business activity is 35 percent, the highest in the world. Small businesses often pay more than that. A 15 percent business tax rate would make us competitive on the world markets. As part of the overall plan, these two reforms would spur investment, which has lagged during the Obama years.
If we allow businesses to recapture money invested immediately, they are almost compelled to invest. Investment creates jobs. A reduction of the highest corporate tax rate allows more money for investment and encouragement to grow.
The Left almost always condemns tax reform, calling it "tax cuts for the rich." This is not true. The goal is to harness the natural desire to grow, to advance, and to create wealth. Job growth is the natural consequence of economic growth. Karl Marx didn't think so, but Marx was wrong, as all history has proven.
Strong economic growth must become the national mission of the United States. Voters want it. Our national mission should be to increase our GDP to $25 trillion as soon as possible. This would end the talk of American decline that endangers our country and world order. Such a robust economy would also improve the quality of life for all.
Jim Gilmore (@gov_gilmore) was governor of Virginia from 1998 to 2002 and chair of the Republican National Committee in 2001. He ran for president in 2016.
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