A Place for Newt Gingrich Supporters and Volunteers
Return to robust job creation with a bold set of tax cuts and regulatory reforms that will free American entrepreneurs to invest and hire, as well as by reforming the Federal Reserve and creating a training requirement for extended federal unemployment benefits to encourage work and improve the quality of our workforce.
Government does not create jobs. The American people create jobs.
We understood these principles when we won the first Republican majority in the House in 40 years in 1994. Balanced budgets, streamlined government and the biggest capital gains tax cut in history led to unemployment falling to under 4% by 2000. Ronald Reagan understood this truth. His bold series of tax cuts and deregulatory measures upon taking office ended the economic stagnation of the 1970s for good by freeing American businesses to create nearly 20 million new jobs in less than a decade. In September 1983 alone the Reagan recovery led the American people to create 1,100,000 new jobs, more jobs than the first eight months of 2011 combined.
My administration will build on this time-tested model: A profound restructuring and reduction of the tax and regulatory burden on Americans, with the very achievable goal of 4% unemployment and millions of new jobs within only a few years.
JOBS AND PROSPERITY PLAN: LOWERING TAXES
First, I pledge to veto any tax increase. American families and businesses deserve certainty and predictability, and I will work to make permanent all current rates of taxation that would otherwise increase automatically in 2013.
My Jobs and Prosperity plan will then make four major tax cuts:
JOBS AND PROSPERITY PLAN: TAX SIMPLIFICATION WITH AN OPTIONAL FLAT TAX
My legislation will also include an optional flat tax of 15% or less. All tax filers would be given the option to pay their income taxes subject to current income tax provisions or to pay under a lower single rate of taxation with limited deductions. A revenue neutral flat tax reform would save hundreds of billions of dollars in compliance costs each year and would eliminate the need for taxes on savings, dividends, and capital gains.
This optional flat tax system will create a new personal deduction of $12,000 for every American. This deduction is well above the current poverty level, ensuring that this new system does not unfairly target the poor. The current $1,000 tax credit for each child aged sixteen or younger would also apply, as would the current earned income tax credit (EITC).
An optional flat tax reform will be simple: tax returns can be done on one sheet of paper. Subtract from income a standard deduction and deductions for charity and home ownership, multiply the result by the fixed single rate of taxation of at most 15%, and the process is over.
Gone will be the stressful hours spent figuring out whether your military service or marital status will adversely affect your return. No more headaches trying to determine where estimated tax payments go. Tax preparation fees could be money spent on something more rewarding.
Such an optional flat tax system would create a new standard deduction, which would be above the established poverty level, meaning an optional flat tax would not unfairly target the poor.
An optional flat tax would eliminate the Alternative Minimum Tax. And if a person had twice as much income as another, he or she would be taxed twice as much. Furthermore, a single rate tax structure would eliminate taxes on savings, capital gains, and dividends. Saving would increase and businesses would expand to create new jobs.
This concept of an optional flat tax would give American taxpayers an opportunity to choose simplicity versus complexity and a single rate over a lot of deductions.
Because the flat tax is optional, it does not raise taxes on a single person or unfairly impact seniors, lower income workers, or the poor.
JOBS AND PROSPERITY PLAN: FEWER AND SMARTER REGULATIONS
To empower job-creators, we must get rid of regulations that prevent them from growing and hiring. This means taking decision-making power away from bureaucrats who don’t understand how job creation works.
My Jobs and Prosperity package would repeal the Dodd-Frank legislation, a 2,300-page law passed in 2010 that mandates 400 new regulations written by unelected bureaucrats. Dodd-Frank is paralyzing lending to entrepreneurs, killing small banks, crippling small businesses, driving down the value of housing, and creating corrupting Washington controls over the biggest banks.
Repeal the Sarbanes-Oxley law, which has crippled American start-ups with burdensome compliance costs, driven publicly-traded companies private, and forced American companies overseas.
Replace the National Labor Relations Board (NLRB) which is harassing job creators. When businesses are targeted unfairly by government for creating jobs in different states, businesses simply won’t create jobs in any states. We need to stop this unaccountable, activist bureaucratic agency from harassing job-creating companies. The NLRB is currently harassing Boeing, our country’s biggest exporter, because it decided to build a new factory and create hundreds of new jobs in the right-to-work state of South Carolina instead of the forced-unionization state of Washington. We need a new common sense organization for labor-management relations to replace the NLRB.
Later in this Contract, I outline ideas for pro-market, pro-growth, pro-consumer reforms to the Food and Drug Administration and the Environmental Protection Agency.
JOBS AND PROSPERITY PLAN: REFORMING THE FEDERAL RESERVE
I will also include in jobs and prosperity legislation provisions to reform the Federal Reserve. They will include a full-scale audit of Federal Reserve activities as well as a narrowing of the Fed’s statutory mandate.
The amount of money Chairman Bernanke has allocated in secrecy is incompatible with a free society. Every decision document and meeting record for 2008 to 2010 should be made public and audited. We the people deserve to know how our money is spent.
The Fed's monetary policy discretion should be limited to following a price rule guiding the conduct of monetary policy. The Fed should monitor the signals provided by sensitive commodity prices with the goal of maintaining stable prices, thereby contributing to a stable dollar without inflation.
The operations of the Federal Reserve have an extraordinary impact over our everyday lives.
The Fed influences how much money is circulating in the economy, the value of the dollar, and what we pay to borrow from banks in the form of interest rates.
Since the enactment of legislation in 1978 known as the Humphrey-Hawkins Act, the Fed has had a dual mandate: maximum employment and stable prices. These two goals are incompatible.
Senator Bob Corker may have said it best when he described the Fed as having today a “bipolar mandate.”
This means that the same policies that the Fed uses to encourage job and economic growth are also the mechanisms that most dangerously weaken the value of the dollar by promoting inflation.
For example, the Fed might increase the money supply substantially in the belief that such monetary expansion will spark economic growth.
But a Fed that floods the economy with new dollars in an attempt to stimulate economic growth and new jobs is a Fed that decreases the value of every dollar in every American’s pocket through higher inflation, making every American poorer.
Historically low interest rates made possible by Fed policies over the past decade fueled an inflationary housing bubble. Home prices exploded due in part to the availability of cheap credit only to collapse disastrously in 2006 and 2007.
As a result, the average American’s home is worth no more than it was a decade ago.
The Fed’s dual mandate also negatively affects job creation. To put it briefly, we will never be able to achieve sustainable long-term job creation in this country if the Fed continues to artificially affect the level of interest rates.
Artificial interest rates distort investment decisions all across the economy, resulting in a misallocation of productive resources that cannot be sustained over the long term. Eventually, artificially low rates lead to an economic bust and widespread job losses. Only when interest rates are no longer manipulated can businesses and entrepreneurs determine the right investments that can in turn lead to sustainable job creation throughout the economy.
Finally, the Fed's low interest rate policy has unfairly punished savers in general and retirees in particular. No one can live off the interest on their savings when it has been artificially kept low by the Fed.
JOBS AND PROSPERITY PLAN: REFORMING THE UNEMPLOYMENT COMPENSATION SYSTEM
The best way to repair our broken unemployment compensation system is to make the problem of perennially high unemployment obsolete through robust economic growth.
But in the meantime, 25 million Americans are unemployed or underemployed. They depend on a system that is costly but does not actually help them get a job. It is a system in dire need of reform. Ninety-nine weeks is too long for any American to be dependent on the government.
It is fundamentally wrong to give people money for 99 weeks for doing nothing. That's why we undertook and passed welfare reform when I was Speaker. It is also why I will introduce a training requirement for extended federal unemployment benefits. We can better help these Americans by requiring them to participate in real training programs in private companies, in exchange for temporary unemployment aid.
Our goal is to convert the time and money now lost to a maintenance unemployment program into a human capital investment program that increases the competitiveness of the American worker in the world market in a time of dramatic scientific and technological change.
This program should be delegated to the 50 states so each can experiment with the best way to use unemployment compensation as a job training program.
I look forward to learning more about the most innovative state-level job-training programs, such as Georgia Works and Texas Back to Work, and hearing your thoughts about how we can create legislation to make the American workforce the most skilled and productive in the world.