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Press Release - The American Spectator: Newt's Economic Recovery Plan

May 18, 2011

Peter Ferrara, a cornerstone of Reagan's Office of Policy Development within the White House, was in attendance when Newt presented his Jobs and Prosperity Plan last week. He gave the plan high marks:

"Last Friday I attended the speech by Newt Gingrich at Art Laffer's annual Investor Conference in Washington, D.C., where Gingrich unveiled his own economic recovery program. This wasn't just campaign rhetoric. The speech was specific, detailed, and comprehensive."

Newt's pro-growth strategy is similar to the proven policies used when he was Speaker to balance the budget, pay down the debt, and create jobs. This necessarily includes stopping the 2013 Obama tax increases and repealing ObamaCare.

"Unless reversed, these economic policies threaten to be the coming crash of 2013. That is why Gingrich first proposes repealing all of these tax increases, including Obamacare in its entirety.

But to produce robust economic growth, he proposes to go well beyond that. He proposes to abolish the capital gains tax altogether, which is just an additional layer of taxation on capital income, in addition to the individual income tax, the corporate income tax, and the death tax. That is why fourteen out of thirty OECD countries, plus China, Taiwan, Hong Kong, Singapore and others, already enjoy zero capital gains taxes.

Gingrich proposed as well corporate tax reform that would reduce the federal corporate tax rate to 12.5%. America today suffers from virtually the highest corporate tax rate in the industrialized world, with a federal rate of 35%, and the states pushing it to close to 40% on average. Yet, much of the rest of the world, ironically, has learned the lessons of Reaganomics. The average corporate tax rate in the European Union has been slashed from 38% in 1996 to 24% today. Canada's rate has been cut to 16%, scheduled to decline to 15% next year, with the ruling Conservative Party recently rewarded with a strong majority of its own in new elections. Lower corporate tax rates prevail among our major competitors in Germany, China and India as well. With a corporate tax rate of 12.5% first adopted in 1988, Ireland enjoyed a soaring increase in per capita income from the second lowest in the EU to the second highest. Our own Treasury Department published a study showing that Ireland raises more corporate tax revenue as a percent of GDP with that 12.5% rate than we do with our much higher rate. How are American companies supposed to compete in the global marketplace with such a disadvantage?

Gingrich's plan also provides for 100% expensing of investment in new equipment so American workers can work with the most technologically advanced tools in the most advanced factories in the world. Gingrich proposes as well to end permanently the death tax and its double taxation of the lifetime savings of Americans.

Finally, Gingrich proposes an optional flat tax of 15%. That means that taxpayers would be free to choose to file their taxes under the current system with all of its complexity, or the new reformed alternative system, where their taxes could be filed on a postcard, saving hundreds of billions in unnecessary costs each year."

The unprecedented expansion of government intrusion under Obama has severely hindered economic growth.

"Underlining his opposition to any cap and trade policies, Gingrich proposed to replace the Environmental Protection Agency with an Environmental Solutions Agency. That is to achieve a fundamental change in environmental policies from anti-growth confrontation with industry to collaboration with job creators to achieve better overall results. He also proposes to modernize the Food and Drug Administration, recognizing the need to get lifesaving medicines and technologies to patients faster, and to remove cost barriers to their rapid development.

Deregulation is also central to the American energy policy Gingrich also advocated. Even at the height of Obamamania in the summer and fall of 2008, Gingrich's "Drill Here, Drill Now, Pay Less" campaign was instrumental in leading then President Bush to rescind the Executive Order banning offshore drilling, and Congress to let the statutory offshore drilling ban expire. Gingrich last Friday called for freeing the energy industry to maximize production of all forms of American energy, from oil to natural gas to clean coal to nuclear power to all forms of alternative fuels. That would assure the reliable supply of low cost energy essential to fueling a booming economy.

Gingrich also called for a balanced budget, first through restoring booming economic growth that would revive surging revenues and itself reduce spending obligations. But that would also involve sharp spending reductions and money-saving reforms that were specified in detail in his 2010 book To Save America, similar to the policies adopted by the Republican Congressional majorities he led in the 1990s to balance the budget then, as discussed further below."

To read Peter Ferrara's full write-up in the American Spectator, visit http://spectator.org/archives/2011/05/18/newts-economic-recovery-plan?

Newt Gingrich, Press Release - The American Spectator: Newt's Economic Recovery Plan Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/298515

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