The so-called mainstream media thinks it has successfully hidden the truth about President Obama’s economic program — it was a dismal failure. The final record shows that over Obama’s entire eight years in office, the annual real rate of economic growth averaged less than 2%. Indeed, Obama was the only president in the last 70 years never to achieve one year of real growth over 3%.
What President Obama’s economic policies produced is the worst recovery from a recession since the Great Depression, because Obama followed exactly the opposite of the consistently pro-growth policies of President Reagan. Instead of cutting tax rates like Reagan, Obama raised the rates of every major federal tax, except corporate rates, already the highest in the industrialized world.
What this means is that there is still a long overdue booming recovery hiding deep within the economy. President Trump will be judged first and foremost by whether his policies produce that booming recovery at long last. Booming recovery would create millions of new jobs, and restore rising real wages.
Trump’s campaign tax reform proposal would slash the federal corporate rate from virtually the highest in the world to one of the lowest, at 15%. The rate for capital gains and corporate dividends would be cut to 15% as well. A special new rate of 20% for small business, which doesn’t face the double taxation of the corporate income tax, would be established as well. All would be effective back to Jan. 1 of this year.
That would provide immediate, powerful incentives now for increased capital investment, starting new businesses, and expanding existing ones, and provide for the increased productivity and increased demand for labor that would restore rising real wages and incomes. Trump cannot let concerns about revenue neutrality water down his proposal.
This would get a booming recovery starting now. Restoring booming growth is the foundation to balancing the budget, as the Reagan recovery ultimately did in the late 1990s. And it’s the foundation to Trump’s landslide re-election, like Reagan won in 1984.
That is why Larry Kudlow and Steve Moore have recently urged that Trump aggressively advance this month his corporate and business tax reform along with his infrastructure plan, in an immediate pro-jobs package that would have broad bipartisan appeal.
They proposed including in that tax reform a provision for a 10% rate on the $2 trillion plus in foreign corporate profits — now lodged overseas due to the current tax code’s double taxation for any of it invested back in the U.S. They propose to use the revenues generated by the resulting repatriation of that $2 trillion for Trump’s planned infrastructure modernization.
We think infrastructure modernization can add to the booming recovery. That is what the economic studies on right sizing government confirm.
Kudlow and Moore urge Trump to move ahead on that jobs package now as the top priority, leaving individual, personal tax reform to be completed later this year. If Trump gets the economy booming again, after Obama’s hopeless, long-term stagnation, his political power will be vastly increased, and he can then win the further tax cuts in his original proposal for individual taxpayers.
Dare the Democrats to further discredit themselves by trying to prevent the tax cuts for working people.
Free-market conservatives need to build an immediate grass roots network to support Trump’s tax reform, following the lead of Dave Hoppe, former chief of staff to Speaker Paul Ryan, who has launched a similar effort, One Nation Health, to support the repeal and replacement of ObamaCare. Businesses and individual donors need to step up and help fund that pro-Trump tax reform grass roots network.
Now is the time for all good men, and women, to come to the aid of their country.
- Uhler is founder and chairman of the National Tax Limitation Committee and National Tax Limitation Foundation (NTLF).
- Ferrara served in the White House Office of Policy Development under President Reagan, and as associate deputy attorney general of the United States under President George H.W. Bush. He is currently principal and general counsel for the Raddington Group and a senior fellow for the Heartland Institute and NTLF.