With a projected 1.8 percent growth rate for the economy in 2016, the economy is still struggling. Since President-elect Donald Trump’s November victory, he has demonstrated a sense of urgency to get the economy back on track by moving quickly to fill his cabinet, far outpacing his predecessors. And it’s clear that with many of his choices, Trump is signaling quite clearly an understanding of how to get our economy moving once again. The president-elect has chosen leaders who have spent their careers strengthening economic activity in the U.S. It is important that they keep this priority as they go to the president’s cabinet.
Trump has nominated former Goldman Sachs banker Steven Mnuchin for the post of Treasury secretary. Mnuchin is already on record declaring tax reform to be the No. 1 priority in 2017, with the goal of stimulating economic growth and creating jobs. In addition to reducing the corporate tax rate down to 15 percent, he also expressed his intention to simplify taxes for Americans, stating that, “Taxes are way too complicated, and people spend way too much time worrying about ways to get them lower.”
Mr. Mnuchin is correct on both fronts.
Taxpayers know all too well how complex our outdated tax code has become in the 30 years since it was last reformed. House Ways and Means Committee Chairman Kevin Brady (R-Texas), along with House Speaker Paul Ryan (R-Wis.), is spearheading the House GOP’s tax reform efforts. Brady and Ryan have promised a plan that “will enable Americans to file their taxes on a form so straightforward it would fit on a postcard” — a breathe of fresh air for frustrated taxpayers.
Second, our corporate tax rate – a combined state and federal rate of almost 40 percent – is the highest among all industrialized nations of the Organization for Economic Cooperation and Development. It also happens to be the third-highest rate among 188 countries and tax jurisdictions, behind only the United Arab Emirates and Puerto Rico. According to the Tax Foundation: “The U.S. tax rate is 16.4 percentage points higher than the worldwide average of 22.5 percent and a little more than 9 percentage points higher than the worldwide GDP-weighted average of 29.5 percent. Over the past ten years, the average worldwide tax rate has been declining, pushing the United States farther from the norm.”
This sky-high rate continues to not only hold back American businesses that are competing on an uneven global playing field, but is forcing those businesses to seek tax relief overseas. America should be a model for pro-growth, pro-investment tax policies that will encourage businesses to stay right here at home.
Trump has tapped Andy Puzder, the chief executive of CKE Restaurants, to be his secretary of Labor. As the head of a corporation with roughly 75,000 employees in 3,000 Carl’s Jr. and Hardee’s restaurants, he should be well aware of the regulatory burden facing the nation’s businesses. According to media reports, Puzder “has been a vocal advocate for cutting back regulations he says have stifled growth in the restaurant industry, which represents 10% of the American workforce.” Pudzer and Trump should also considering repealing the Department of Labor’s costly fiduciary rule that is set to take effect in April. The massive rule spans more than 1,000 pages and reduces the ability of financial advisers to give advice to IRA and 401(k) holders. Estimates show the fiduciary rule could disqualify as many as 7 million IRA holders from investment advice and reduce the number of IRAs opened annually by as many as 400,000.
Finally, former Texas Gov. Rick Perry has been selected as secretary of Energy and is expected to embrace all of our nation’s abundant energy resources. After his nomination was announced, he told reporters: “As the former governor of the nation’s largest energy producing state, I know American energy is critical to our economy and our security. I look forward to engaging in a conversation about the development, stewardship and regulation of our energy resources, safeguarding our nuclear arsenal, and promoting an American energy policy that creates jobs and puts America first.”
Perry is correct. The energy industry, long a target under the Obama administration, has continued to be one of the few bright spots in our economy. It employs close to 10 million jobs and contributes to economic growth and capital investment. Continuing energy resource development will not only secure America’s role as a global energy leader but will also secure our economic and energy future.
Thus far, these cabinet nominees show great promise. Together, their leadership should bring industry neutral tax reform, balanced regulations and a strong energy industry – all vital steps for rebuilding the nation’s economy. But, in the words of former President Ronald Reagan, we will “trust, but verify.”
David Williams is president of the Taxpayers Protection Alliance.
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