Peter Morici: A tax cut America can afford

Seth Wenig, AP

FILE – In this Monday, Aug. 24, 2015, file photo, people walk past the New York Stock Exchange. The Republican tax plan eliminates a lot of exemptions and deductions, and applies the savings plus another $1.4 trillion over 10 years to lower rates. The benefits are broadly spread — contrary to the invectives from Democratic leaders Charles Schumer and Nancy Pelosi, the plan will cut the federal bite for more than 90 percent of taxpayers in 2019.

Democrats believe boosting welfare — free health care, subsidized housing and food stamps for able-bodied adults who refuse to work — is the road to growth. Republicans believe giving money back to folks who earned it is the better path.

The Obama recovery gave us 2.1 percent growth. If a reconciled bill from the House and Senate is signed into law, we will see if President Reagan’s magic still works. He got better than 4 percent growth from tax cuts and deregulation.

The Republican plan eliminates a lot of exemptions and deductions, and applies the savings plus another $1.4 trillion over 10 years to lower rates. The benefits are broadly spread — contrary to the invectives from Democratic leaders Charles Schumer and Nancy Pelosi, the plan will cut the federal bite for more than 90 percent of taxpayers in 2019.

Americans have a proud tradition dating back to Thomas Jefferson: put more money in their pockets and they spend it. These days, that means a nice boost for restaurants, auto dealers and perhaps in applications at my university or at least on what’s really important — sales of football and basketball tickets and mugs, T-shirts and other paraphernalia at the college bookstore.

Any way you slice it, that’s just like President Obama handing out more food stamps, but this time the money goes to hardworking families instead of indolent computer game aficionados.

Slashing the corporate tax rate from 35 percent to 20 percent, along with some other changes in levies on foreign income, would put U.S. businesses on a more level playing field with competitors in Europe and Asia. That will make America a more attractive location for factories and research and development, and stop the hemorrhaging from…

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