Rachael Slobodien - January 08th, 2018
Only a few days into 2018 and we’re already off to a roaring start. This week the Dow reached and surpassed the historic mark of 25,000, but that’s only the beginning of good financial news. The S&P 500 and Nasdaq also reached record highs.
Below we’ve compiled several highlights that demonstrate just how solid the economy is growing under President Trump and the Republican Congress. No matter how much the mainstream media seeks to underreport it, these numbers don’t lie.
For example, well over 100 companies have awarded employees with “Trump Bonuses” after tax reform victory. Not only are we seeing job opportunities increasing, our economy is also witnessing the lowest level of job-layoffs since the 1990s.
It’s worth noting that this may be getting too big for even The New York Times to ignore. Check out this headline from New Year’s Day: The Trump Effect: Business, Anticipating Less Regulation, Loosens Purse Strings.
In the same vein, CBS News recently released a report on how the tax reform legislation will likely impact different households throughout the country. Even the CBS analysis showed that each of the three households examined would pay less in taxes as a result of the tax legislation.
But perhaps the best news is that this is only the beginning of the great things to come as a result of lower taxes and reduced regulations under President Trump. On the regulatory front, the Trump Administration already has done much to rein in the regulatory state.
For example, in his first year in office, President Trump has:
- Rolled back Obama’s net neutrality regulations;
- Rolled back costly and ineffective global warming regulations at the Environmental Protection Agency;
- Eliminated 22 regulations for every new regulation and creating regulatory cost savings of $8.1 billion;
- Worked with Congress to return private property to citizens by reducing the amount of land currently under the strong arm of the federal government.
More is still to come. For example, a recent analysis shows that our nation’s Gross Domestic Product (GDP) will rise to well above 5 percent! (This is an additional 2.2 percent growth in the long run). That increase translates to roughly $3,000 per household income increase! That’s a significant amount for families struggling to make ends meet. And remember, this is along with increased job opportunities and private-sector bonuses.
But as Club for Growth has been quick to note before, the Tax Cuts and Jobs Act passed last December shouldn’t be viewed as the endgame – rather, it’s just the beginning.
As both the House and the Senate return to Washington next week, Club for Growth encourages Congress to seize this momentum and continue to fight for more pro-growth reforms.
Below we’ve compiled an outline of a few pro-growth starting points for this year, particularly as Congress looks to enact more reforms to grow our economy. As Club for Growth has noted before, Congress should take up a new tax bill next year, which includes:
- Having a real 25 percent maximum rate for businesses organized as subchapter S corps or LLCs, rather than artificial exclusions for sectors like financial services, and unfairly excluding 80 percent of business income from the pass-through rate.
- Making permanent the temporary tax cuts for individuals.
- Eliminating the Death Tax.
- Repealing fully the Alternative Minimum Tax.
- Cutting capital gains taxes to spur individual investments.
- Repealing fully the taxes in Obamacare.
Rachael Slobodien - December 07th, 2017
Washington, DC – Today, Club for Growth President David McIntosh sent a letter to Majority Leader McConnell, House Speaker Ryan, and members of the tax conference committee. An excerpt of the letter is below. The letter can be read in its entirety here.
“As conference discussions begin, Club for Growth wants to ensure that the most significant pro-growth provisions in the House and Senate legislation are preserved and not lost in an effort to appease special interests pleading to retain their particular tax benefit. In other words, we want to make sure that what comes out of the conference committee is more pro-growth and not less than what went into it.
Club for Growth urges the conferees not to increase any marginal tax rates.
- Stand firm and keep the corporate rate at 20 percent.
- We believe lowering the corporate rate to 20 percent is among the most pro-growth components in both versions of the legislation. As the Tax Foundation has found, cutting the corporate rate from 35 percent to 20 percent will increase our nation’s GDP by 3.1 percent in the long run. It will also increase the size of the U.S. economy by nearly 4 percent and result in 3 percent higher wages for American workers.
- Adopt at least the Senate’s top individual marginal tax rate and reject the House’s proposal. Further reductions in the top individual rate would create even more economic growth.
- Lowering this rate benefits all Americans by spurring more investment and thereby creates economic growth and jobs throughout our country. The Tax Foundation has found that lowering income tax rates by 10 percent – a similar reform to the Senate proposed rates – would further boost the economy by 1 percent. Additional reductions in income tax rates would provide even greater benefits to all Americans.
- Include the Senate’s repeal of the individual mandate.
- This provision will allow over $300 billion in additional tax cuts, making the overall bill even more pro-growth. This should not be a point of contention. The Senate included the repeal of the Obamacare mandate in their version, and the House has repeatedly voted to repeal it in previous years.
Conference meetings inevitably require tradeoffs to rectify the differences between the legislative texts. In making those tradeoffs, Club for Growth strongly urges conferees to stand strong and fight for the most pro-growth policies that benefit all Americans and not diminish them by giving in to class warfare or social engineering arguments.”
Rachael Slobodien - December 06th, 2017
Washington, DC – Today, Club for Growth President David McIntosh issued the following statement upon the Senate’s passage of tax reform:
“Congratulations to the Senate for passing the “Tax Cuts and Jobs” Act. We particularly are grateful for the hard work of conservative champions who fought tirelessly to incorporate pro-growth policies in the legislation making the list of conservative victories a long one. Between repealing the individual mandate and eliminating the SALT subsidies for high-tax states, conservatives have much to celebrate.
“Club for Growth now calls on Speaker Paul Ryan to bring the Senate version of the bill to the House floor for passage next week. The bill should arrive on President Trump’s desk before Christmas giving the American people a well-deserved present. If some House members have lingering concerns, Club for Growth supports efforts to take up those reforms in another tax reform bill next year.
Club for Growth looks forward to the next steps as pro-growth tax reform — and the economic prosperity it unleashes — now becomes a reality for our nation.”
Rachael Slobodien - November 29th, 2017
Washington, DC – Today, Club for Growth President David McIntosh issued the following statement in response to talk of an automatic tax hike trigger being added to the Senate’s tax reform package:
“The idea of a ‘tax hike trigger’ should be rejected on its merits,” stated Club for Growth President David McIntosh.
“Any senator who understands basic business principles and truly cares about the deficit should understand that this trigger is an automatic tax increase and will actually harm economic growth. It will have harmful impacts on American businesses and undermine any economic growth potential in this tax reform bill because businesses will not invest due to the possibility of a higher tax rate.
“What Senators Lankford and Corker are saying here is that if the deficit gets too large, then they want to tax people more. Here’s an idea. How about cutting spending? Just yesterday Senator Lankford issued 100 wasteful examples of federal spending. But instead of cutting the programs, ironically, Senator Lankford would allow wasteful measures like them to continue to receive funding – through his automatic tax increases no less!
“If they’re truly worried about the deficit and they want to establish a trigger, then they should limit the size of government. A spending cut trigger would be a far better idea.”
Rachael Slobodien - November 18th, 2017
This the House of Representatives took a significant step towards reforming our nation’s broken tax code when it passed the “Jobs and Tax Cuts Act.” Ahead of the vote, Club for Growth released a key vote alert urging members to cast a “YES” vote for the legislation. The bill passed the House by a vote of 227-205, with thirteen Republicans – mostly from high-tax states - ultimately breaking ranks and voting against final passage.
The House bill is significant because it slashes the corporate tax rate, enacts full expensing and a territorial tax system, ends the Death Tax, cuts marginal tax rates for individuals, and eliminates several loopholes and deductions, including a partial elimination of the unfair state and local tax deduction (SALT).
However, Club for Growth appropriately recognized the House’s “Jobs and Tax Cuts” Act legislation was not without faults. Now that the House has passed its bill and ahead of the Senate passage, Club for Growth strongly urges Republican leaders to fix the problems in the bill. For example, the House’s bubble rate for high-income earners should be eliminated as well as the 39.6 percent top tax rate. The conference report in the Senate must include repeal of the dreaded individual mandate. If these changes are incorporated into the final bill, passed by Congress, and signed into law by President Trump, we believe the economy will roar. Club for Growth is working unceasingly to ensure that those changes happen, and we will keep you posted as the debate continues to progress.
We are confident that these shortcomings will be addressed as the Senate continues to work on its iteration of the tax reform bill. In fact, the Senate bill is already an improvement on the House bill in several ways. For example, the Senate legislation includes a provision to repeal Obamacare’s individual mandate.
Earlier this week, Club for Growth President David McIntosh coauthored an op-ed praising the Senate for including repeal of the individual mandate in its tax legislation. As the opinion piece explained, “Given the Senate’s rules and unnecessary, self-imposed budget constraints, most improvements would require congressional tax writers to find ‘savings,’ i.e., tax increases, elsewhere in the tax code. As we have seen, those trade-offs can be painful in a town filled with corporate welfare, cronyism and self-entitlement. That is why eliminating Obamacare’s individual mandate tax penalty is such a politically advantageous option available.”
The op-ed in Real Clear Politics went on to explain additional reasons why it is advantageous for the Senate to include a repeal of the individual mandate. “First, recent polling suggests a plurality — roughly 45 percent of voters — support the Republicans’ tax reform efforts. According to a 2017 YouGov poll, nearly two-thirds of Americans want the individual mandate repealed. That number jumps to 81 percent when looking just at Trump voters. In other words, including repeal will increase the popularity of the tax package. Second, eliminating the individual mandate penalty will alter the CBO’s health insurance coverage calculation when Republicans return to repeal-and-replace next year. Remember, the CBO routinely estimated that 15+ million people would “lose” insurance coverage because the bill eliminated the individual mandate, handing the media and the left a powerful talking point against any future reform.”
While the Senate bill has many strengths, more can be done to strengthen it. For example, Senator Ron Johnson (R-WI) this week indicated he cannot support the legislation in its current form. As The Wall Street Journal reported, Senator Johnson has concerns about the treatment of pass-throughs and family-owned businesses. Senator Johnson’s hesitations are warranted, and Club for Growth also wants to make certain that tax reform includes the best treatment of pass-through businesses. In order to achieve the most pro-growth policies and unleash the greatest amount of economic growth, it is imperative Congress do as much as possible to lessen the burdens family-owned businesses and corporations face. We are confident that Senator Johnson’s concerns will be worked out and that the Senate will deliver on a pro-growth tax reform bill.