The GOP Must Make Tax Reform an Immediate Priority

The Trump Administration has waged war on anything that could impede businesses. But, the president and GOP-led Congress need to pass a major tax cut to create sustained economic growth.

That idea may seem counter-intuitive given the recent string of successes. The Dow Jones Industrial Average cracked 22,000 for the first time in history, and other measures such as NASDAQ and S&P 500 have also enjoyed record-setting “Trump Bumps.” Unemployment dipped to 4.3 percent, a 16-year low, and job creation has exceeded expectations.

Despite all these fair-weather forecasts, America’s economy isn’t out of the woods yet – and it won’t reach its full potential until Americans are allowed to keep more of what they earn.

Is The Stock Market an Illusion?

The fundamental concept of stock indexes is that they only measure corporate profits. Those profits are assumed to be linked to productivity, and that’s where the average person can say those numbers reflect whether the economy is thriving or shrinking. But if you draw a correlation between stock shifts and presidents, the first year of an administration tends to blur the lines.

When Barack Obama won the presidency, the stock market immediately tanked right after election night. In anticipation of his climate change regulations, businesses braced themselves for revenue losses. Left-leaning pundits like to attribute that sharp November dip to former President George W. Bush, but the Obama Administration suffered a 33.84-percent DOW Jones hit during 2008.

DOW Jones data shows a quick dip in the weeks leading up to the 2016 election based on the expectation Hillary Clinton would winm and again impose business-draining regulations. When Donald J. Trump stunned the country, the market shot up like it was hit by electric shock paddles. Major corporations swelled with consumer confidence, and the swift elimination of job-killing and costly regulations have vaulted corporations to today’s record highs.

As wonderful as all that sounds, experts are pointing out that a disparity exists between business confidence based on recent profitability, job growth and the restoration of America’s manufacturing base.

Why Trade Deals Are Only Helping

Pulling out of the Trans-Pacific Partnership, opening Chinese markets, renegotiating NAFTA and other “America First” trade initiatives appear to be stemming the tide on deficits and helping to buttress U.S. productivity.

These once poorly conceived agreements put the United States on the same economic bargaining level as Mexico, Peru and Brunei. Most people would need Google maps to figure out where Brunei is located. Yes, that was an Obama-Clinton idea.

Heading into the second half of only his first year, the Trump Administration’s new direction has some solid indicators that things are trending in the right direction. The gross domestic product (GDP) score saw a recent uptick to 2.6 percent. Consumer spending increased, but trade deficits remain in the $40 billion range each month.

The fundamental thing holding America’s GDP back is that multinational companies look for the most profitable place to make goods, and that ain’t the U.S.

Why Tax Cuts Matter

You’ve heard the Bernie Sanders, Chuck Schumers and Nancy Pelosis of the world decry tax cuts as benefiting the rich at the expense of the poor. In terms of business tax cuts, nothing could be further from the truth.

Corporate tax cuts and incentives are gateways to growth, and growth means jobs. The most economically challenged Americans hover between part-time jobs and unemployment. Tax cuts move more people into gainful full-time employment. If it were up to the White House, massive business tax cuts and incentives would have hit the books the moment Trump took his hand off the Bible. So, what’s holding the administration back?

The GOP-led Senate continues to wrangle over the repeal and replace of Obamacare. The previous administration, in conjunction with a Democrat-held Congress, effectively embedded the un-Affordable Care Act into legislation that impacts cross-agency budgets and taxation.

In other words, Republicans need to remove the tumor before the patient can get well. Once the Obamacare cancer has been eradicated, the scope of possible tax cuts can be understood and moved upon.

Despite short-sighted trade agreements like NAFTA that sent companies and jobs across our borders, getting them back boils down to simple math. If cars can be made in Detroit less expensively than Mexico, GM, Volkswagen and Ford will build them there.

Inhibiting regulations have been stripped away, and more will fall. But America needs to fight a tax-incentive war with foreign entities to retrieve its once world-leading manufacturing sector. If not, economic measures, jobs and profits are likely to backslide.

America needs a tax cut now.

~ Liberty Planet