On the very day President Donald Trump’s incentive-based tax and regulatory policies are put in place, Barack Obama’s war on business will have officially come to an end. No longer will American companies be punished by uncompetitive rates of taxation and unnecessary rules and regulations.
Business tax rates are coming down from roughly 40 percent to 15 or 20 percent, which is not only a boon for business, but a godsend for the middle class. Slashing business tax rates for both large and small businesses will generate significant new investment, jobs, and growth, all of which will lead to higher wages.
And when people and businesses get to keep more of what they earn, more of what they invest, and more of what they risk, they are incentivized to keep doing more of these activities.
In essence, that’s the Trump economic plan. The president is saying: “We will reward success, not punish it.” He’s also saying: “The war against business is over.”
And that means growth, growth, growth.
You want to lower the budget deficit? You want to lower the debt-to-GDP ratio? Then grow the economy. Not by 1 or 2 percent, which is the lackluster growth rate that solidified during the Obama years. But by 3 or 4 percent.
That level of consistent economic growth will solve a lot of problems. Every 1 percentage point in GDP above the baseline, which is 2 percent today, cuts deficits by more than $3 trillion over ten years.
A U.S. manufacturing boom or more companies staying and making things at home — those are great things. But I don’t want the U.S. to be an export-led economy. I want us to once again be a market-driven economy. And if we reinvigorate market incentives with tax and regulatory reform, we will once again be king of the hill for economic growth.