Essay: 12 American Solutions for Jobs and Prosperity
Washington solutions of more money for more government, more power for politicians, more debt, and more bureaucrats will not lead to real growth in jobs and prosperity. We need a clear and decisive alternative that creates jobs and rewards work, saving, and investment.
- Payroll Tax Stimulus. With a temporary new tax credit to offset 50% of the payroll tax, every small business would have more money, and all Americans would take home more of what they earn. A tax credit that offsets 50% of the payroll tax would put close to $1,500 in the pocket of the typical worker making $50,000, with the same amount going to the employer. This would mean an increase in take-home pay for every American worker, and it would put more money into the hands of small businesses.
- Real Middle-Income Tax Relief. Reduce the marginal tax rate of 25% down to 15%, in effect establishing a flat-rate tax of 15% for close to 9 out of 10 American workers. Marginal tax rates for middle-income families in the 25% tax bracket are too high. Add in effective payroll tax rates of 15% and state income taxes, and these workers are laboring under marginal tax rates of close to 50%. No wonder middle-income wage growth has slowed sharply. Reducing the marginal tax rates for these middle-income earners would lead to income increases for middle-income workers, just as reducing excessive marginal tax rates for higher-income workers did, going all the way back to the Kennedy tax cuts of the 1960s.
- Reduce the Business Tax Rate. Match Ireland’s rate of 12.5% to keep more jobs in America. America has the second-highest corporate tax rate in the industrialized world, with a federal rate of 35 percent--rising to 40 percent on average with income taxes. The average corporate tax rate in the European Union countries is 24 percent. Even India and China have lower corporate tax rates. Ireland adopted a 12.5 percent corporate tax rate 20 years ago. Since then per capita income has soared from the second-lowest in the EU to the second-highest. Small businesses are responsible for the overwhelming majority of jobs created in America. A reduction in the corporate tax rate would allow them to keep more of their money and hire more employees. Owning or operating a business is hard and expensive. Our government should not make it harder and more expensive. Lowering the business tax rate would create and keep more jobs in America, instead of exporting them to other countries.
- Homeowner’s Assistance. Provide tax credit incentives to responsible home buyers so they can keep their homes. The housing crisis stems from the fact that there is an excess supply of housing. This abundance of houses on the market significantly decreased demand for housing and caused defaults to rise sharply. Reducing the existing supply of housing by providing a tax credit to responsible home buyers, reduces defaults by slowing price decline. As a result, increased housing demand will work to stabilize prices and brings nearer the time when home building increases.
- Controlling Spending So We Can Move to a Balanced Budget. This begins with eliminating Congressional earmarks and wasteful pork-barrel spending. A government of the people, by the people, and for the people is one that is responsible with the people's money. The most effective way to allow American wealth to be harnessed for the benefit of society is to put it in the hands of the people who will put it back in the economy. As the federal budget has only been balanced for four years out of the last twenty five, some of the critical building blocks to a successful and prosperous economy have been absent. Restoring fiscal sanity and accountability to Washington also means eliminating wasteful pork-barrel spending. The budget process must be both honest and transparent, and spending should never be a result of insider connections in Washington.
- No State Aid Without Protection From Fraud. Require state governments to adopt anti-fraud and anti-theft policies before giving them more money. The Government Accountability Office recently released a report that shows over 10 percent of Medicaid payments were improper in 2007, or $32.7 billion in one year. In just New York along, over $5 billion a year is wasted as a result of fraud. Such fraud and abuse in our entitlement programs drives up costs, and it will only get worse as more Baby Boomers retire and enter the system. When government decides to spend our tax-dollars, we must demand honesty, transparency and accountability. Therefore, states must be required to adopt best practices, such as moving to electronic records, if they are to receive any tax-payer money.
- More American Energy Now. Explore for more American oil and gas and invest in affordable energy for the future, including clean coal, ethanol, nuclear power and renewable fuels. We have more energy resources than any country in the world, yet we are sending billions of dollars every year to foreign dictators to meet our energy needs. That is bad for both our economy and our national security. We can begin to solve this problem by drilling for more of our own oil and gas. By making the transition to clean coal technology, we can utilize our vast resources of coal (27 percent of the world’s reserves), dramatically reduce carbon emissions, and become a worldwide leader in green technology. France currently gets the majority of its electrical power from nuclear plants. While it is essential that the government establish safety standards, we should work to reduce the barriers to nuclear investment so we can take advantage of this clean, reliable energy source. We have the ability to replace a meaningful percentage of our gasoline consumption with ethanol if we aggressively develop the millions of tons of biomass in America. A Manhattan project to stimulate advances in renewable fuels and alternative energies will allow us to eventually produce safe, clean, efficient and inexpensive fuels here at home. Developing more American energy will translate into more money and jobs staying in America.
- Abolish Taxes on Capital Gains. Match China, Singapore and many other competitors. More investment in America means more jobs in America. The current tax on capital gains constitutes double taxation, to which no American should be subjected. Already taxed on income, if an individual decides to save or invest his or her money then the government taxes it again. Eliminating the tax on both personal and corporate capital gains would encourage saving and investment, boosting the economy by empowering the taxpayer rather than the Internal Revenue Service.
- Protect Our Right to Vote in the Workplace. We must protect a worker’s right to decide by secret ballot whether to join a union. Workers have had the right to a secret ballot since 1935, to ensure that they would have a vote free of coercive pressure. The Employee Free Choice Act would replace the secret ballot with a card-check system that would make workers' votes public and subject to intimidation by union organizers. Forced unionism will kill jobs and drive them out of America, at a time when we cannot afford to lose them.
- Replace Sarbanes-Oxley. This failed law is crippling entrepreneurial startups. Replace it with affordable rules that help create jobs, not destroy them. It has been six years since Congress passed the Sarbanes-Oxley Act after the devastating accounting irregularities of Enron and WorldCom. While the intent of the law was to prevent corporate fraud, there is growing evidence that it has done more harm than good, and is undermining the venture-capital industry in Silicon Valley. Economic growth in a sound market economy requires smart regulation, not destructive regulation that hurts economic growth.
- Abolish the Death Tax. Americans should work for their families, not for Washington. The “Death Tax” is an unfair double taxation that hurts working families. The assets that working Americans earn or produce over their lifetime have already been taxed once. Not only does the “Death Tax” undermine savings and investment needed for small business growth, these taxes undermine the promise that hard, honest work will be rewarded.
- Invest in Energy and Transportation Infrastructure. This includes a new, expanded electric power grid and a 21st century air traffic control system that will reduce delays in air travel and save passengers, employees and airlines billions of dollars per year. Though we often take modern transportation systems for granted, the development of effective transportation technology and infrastructure is one of the prime factors behind our individual and national prosperity. Transportation systems have dramatically reduced economic transactions costs, increased the speed and reliability of trade and communication, and brought enhanced quality and convenience to the lives of individuals across the country. The future of American prosperity will at least partially depend on our ability to meet modern transportation demands with innovation and effectiveness.