Economic Growth Will Pay For Mitt Romney's Tax Cuts

[Conservative]

http://www.forbes.com/sites/louiswoodhill/2012/08/22/economic-growth-will-pay-for-mitt-romneys-tax-cuts/

The critics of the Romney tax plan are missing the point. The only “tax base” that matters is GDP. The Romney tax plan will broaden the tax base by increasing GDP. Whatever it does or does not do to broaden the tax base by “closing loopholes” is a sideshow.

America’s 2011 GDP was the result of an average real economic growth rate of 3.73% over the 221 years from 1790 to 2011. If, during this period, our economy had grown at 1.47% real, which is what we have averaged for the first 3.5 years of Obama’s presidency, our 2011 GDP would have been about $116 billion, which is about the same as that of Bangladesh. Our GDP per capita would have been $371, which would have put us just ahead of Sierra Leone.

If they were honest, Obama and the Democrats would say that they believe that federal taxes should collect about 25% of GDP. This is what they want to spend. Romney, Ryan, and the Republicans would say that the federal tax take should stay at its historically normal level of about 18% of GDP.

Anything that the government gives the middle class, it must first tax away from them. Taxes on “the one percent” cannot even pay for national defense and interest on the debt, much less benefits for the “the 99 percent”.

The only thing that can truly benefit the middle class is more private sector jobs at higher wages. The only thing that can produce this is a much higher rate of economic growth. Romney’s supply-side tax plan would produce a higher rate of economic growth, so it would benefit the middle class, as well as everyone else.

Under Obama, real economic growth has averaged 1.47%, which is the lowest growth rate for the first 14 calendar quarters of a presidential term since the end of WWII. Interestingly enough, the runner-up, which was Bush 41 (1.84%), was denied reelection.

Romney’s plan will grow the economy and create jobs. What tax loopholes he does or does not close makes very little difference. The tax base is GDP, and Romney’s plan will grow GDP.