Don’t look now, but years of poor economic performance has is taking its toll on America. The trajectory of our projected growth is so low, that the United States could be headed for a debt crisis, wherein we will not be able to meet our obligations and simultaneously service our debt.
In order for America to grow, it must profit; in order to profit, the government must stop feasting on capital that will finance the growth of tomorrow.
This reality has not escaped U.S. Rep. Roger Williams (R-Texas).
Williams has proposed the Jumpstart America plan as a comprehensive means of jolting America’s economic engine back into driving growth. He proposes having two new tiers for the income tax, 20 percent on earnings below $1 million, and 30 percent on earnings above $1 million. He would leave the 10 and 15 percent brackets intact to avoid raising taxes on low and middle income earners.
Williams’ plan nearly halves the corporate income tax rate to 20 percent, below the world average of 25 percent. This remove the incentive of corporate inversions, making the United States considerably more competitive, and nearly more cost prohibitive to leave as opposed to staying put. He also has a bill to incentivize repatriation of the nearly $2.1 Trillion that American corporations have stockpiled overseas, only levying a 5 percent tax to bring the money home.
Jumpstart America would also reduce payroll taxes by an additional 2 percent, giving working families more disposable income. It would also reduce Capital Gains taxes to 15 percent. On top of the various tax reforms, his plan would return to 100 percent depreciation, as well as preserve “first in, last out” accounting practices, both of which would save businesses money that could be allocated to hiring and eventual growth.
Without substantial economic growth, our tax problems will soon cease to matter, as a debt restructuring, also known as default, could be on the horizon. Whether or not it comes to that, it would be much better for the United States to return to steady economic growth, and reduce the tax and regulatory burdens that hold back the American people from fixing what government has wrought.
And with the help of sensible, consolidated approach like Williams’ Jumpstart plan, the United States can begin to dig itself out of the debt crisis, but more needs to be done. Cutting taxes and growing the economy will only work if the government begins to live within its means and stop spending the growth of tomorrow.
This is a guest post by Dustin Howard a contributing editor to Americans for Limited Government