By Newt Gingrich • Fox News
The left-wing media and the elites never seem to tire of being wrong.
Remember in May when President Trump said his policies would spur the U.S. gross domestic product (GDP) to grow at a rate of 3 percent or higher? The so-called experts insisted that it was unrealistic, highly unlikely, and probably impossible.
Some of these experts suggested 3 percent growth could only happen if our immigrant population doubled over a decade or the nation went to a six-day work week. They said even if unemployment fell to zero, we still wouldn’t get close.
Imagine their surprise then when the Commerce Department announced on Friday that the GDP has grown at 3 percent – for the second quarter in a row.
This is a big victory for President Trump and Republicans. Growth has been driven by the administration’s aggressive deregulatory efforts, its America first position on trade, and other economic policies.
Americans – including members of Congress – should remember how wrong these so-called experts were when the Republicans unveil the 2017 tax cut plan. Serious tax cuts will be the key to sustaining 3 percent economic growth – or higher – for years to come.
The Trump-GOP tax cut plan will cut the corporate tax rate from 35 percent to 20 percent – and set a 25 percent maximum tax rate for small businesses and other pass-throughs. This alone will create jobs, increase wages, and help spur GDP growth.
The White House Council of Economic Advisers says the corporate tax cut will increase median household income by $3,000 to $7,000. It will be very interesting to see how congressional Democrats try to justify voting against a $3,000 to $7,000 income raise for American families.
The plan also restructures the way we tax multinational businesses and incentivizes large U.S. companies to invest their earnings back into the U.S. economy. Currently, such businesses have an estimated $2 trillion to $3 trillion in foreign earnings that could be repatriated under the GOP plan.
A recent report by the nonpartisan Tax Foundation estimated the GOP plan, “would boost long-run GDP by 9.1 percent. The larger economy would translate into 7.7 percent higher wages and result in 1.7 million more full-time equivalent jobs.”
In addition to creating jobs and boosting salaries, the plan will reduce taxes for low- and middle-income taxpayers by doubling the standard deduction to $12,000 for individuals and $24,000 for married couples. That means the first $12,000 a person earns would be tax free.
According to the Federal Reserve Bank of St. Louis, real median personal income in the United States in 2016 was $31,099. So, a single person making the median income under the new GOP plan would not pay taxes on 39 percent of his or her income. A person making below the individual poverty threshold would pay nothing in taxes.
Finally, under the Trump-GOP tax cut plan, most Americans would save considerable time and money filing their taxes because most people will be able to use a federal tax form the size of a post card. The individual tax rate brackets would be folded down from seven to three or four, and the onerous alternative minimum tax would be abolished. This reduction in complexity is like having a second income increase since people will save the money they have been spending on tax preparation.
The Democrats and the liberal media will no doubt continue to try to find so-called experts who oppose the Republican tax cut plan. Americans should consider how often these supposed experts have been wrong about President Trump and his policies.
Sustained 3 percent economic growth in America – or higher – is entirely possible, and the Republican tax cuts will help get us there.