Where's The Growth?
Rep Tim Scott's (R-SC) gutsy Rising Tides legislation may be an economic panacea.
In a line made famous by former Vice President Walter Mondale during his 1984 Democrat presidential primary debate with Sen. Gary Hart, the simple question, "where's the beef?" exposed Hart's policy deficiencies and propelled Mondale to his Party's nomination.
Every member of Congress today is grappling with the tough but necessary Federal deficit reduction choices that must be made to stem the sea of red ink that looms as far as the eyeshades can see. Yet we are compelled to pose an economic question of similar magnitude: "Where's the growth?"
While deficit reduction is paramount and certainly serves as the lynchpin to our nation's future economic stability, we can't just cut our way to prosperity. We need to grow our economy. We need to create jobs. We need to get people back to work. We need to inspire opportunity. We need to take back the American dream that has been our hallmark of freedom for better than two centuries.
More jobs will grow our tax base, in turn increasing revenue. The quickest and most effective way to balance the Federal budget is to cut spending while growing revenue simultaneously.
How do we grow jobs? President Obama tried to do it through his now infamous government infused stimulus package of 2009. Billions of dollars of new debt later, and the nation's unemployment continues to hover around double digits. Government can't create prosperity and economic growth. It can only hinder it.
Enter U.S. House Rep. Tim Scott (R-SC), stage right. He's an African American freshman from Charleston who grew up dirt poor and galvanized Tea Party support to upset the typical GOP machine candidates in his primary.
Scott [pictured below], who worked his way up the economic ladder the old fashioned way -- through sweat equity and hard work – says he has a better way. He's put his money where his mouth is by introducing H.R. 937: the Rising Tides Act of 2011.
This bill may be an economic silver bullet if there ever was one. Former President Ronald Reagan, who ignited the greatest period of sustained economic growth in this nation's history, was fond of saying, "A rising tide lifts all boats." The crest of Reagan's tide was as simple as it was iconic: he cut corporate taxes to spur investment and presided over a period of historic job creation. Remember, Reagan's public policy and political nay-sayers mocked his plan as "trickle down economics." But the so-called "trickle" soon transformed into an economic flood of new jobs and opportunity for everyone.
Specifically, Scott's Rising Tides Act drops the corporate tax rate from 35 percent to 23 percent, a decrease that is historically proven to promote job creation and fire up the engines of economic stimulation.According to Americans for Tax Reform, our current 35 percent tax rate is the second highest in the world, putting the U.S. economy at an extreme disadvantage when attempting to compete for business development in the new global economy. International companies that want to locate in America and hire U.S. workers are forced to go elsewhere, taking those jobs with them. Exasperating this phenomenon are American companies that make profits overseas but don't want to reinvest those dollars back home due to the suffocating double tax scam the IRS imposes on them. If they take that same capital and invest it here their profits are taxed twice -- once by their host country and then again by their broke uncle, whose name is Sam.
Scott's gutsy proposed legislation eliminates the tax duplicity and removes that barrier of economic discouragement. As an example, the most recent double tax "repatriation" holiday was in 2005. It brought in $320 billion worth of new capital investment, and $17 billion in new tax revenue -- that would have otherwise sat overseas had the tax rate not been temporality lowered to a maximum of 5.25 percent.
Making this measure permanent would ensure that billions of dollars of capital would never be held as an overseas tax hostage again.
So where's the beef?
It's economic growth and prosperity. It's called the Rising Tides Act of 2011.