By Peter Roff, Thomas Jefferson Street blog
Former House Speaker Newt Gingrich delivered the keynote address at Monday's Republican congressional fundraising dinner as "the man of ideas" in the GOP. The man behind the Contract with America and the party's successful drive to majority in 1994 had, as the basis of his remarks, a platform of ideas on which Republicans can base their efforts to win back seats in the House and Senate at the next election.
Criticizing President Obama's approach to solving the recession as having already failed, Gingrich urged congressional Republicans to develop a "free-enterprise-based, entrepreneurial, market-oriented stimulus package" of their own to offer in contrast to what the Democrats have enacted.
First of all, Gingrich says, rather than focus on bailing out big businesses, the Republican approach should do something that would be especially good for small business, which economists agree is the real engine for job growth in the United States. And so, he said, "Let's get money to the people who work and the businesses who hire them" by enacting a two-year, 50 percent reduction in the Social Security and Medicare tax for employers and employees, thus freeing up significant resources that could be used to put people back to work and keep marginal businesses from closing.
Gingrich also called for the United States to match the Chinese on the capital gains tax—really a tax on savings and investment and job creation and economic growth—by reducing the U.S. rate to what it is in China: zero. And, to compete in the global economy for profitable businesses to locate their next factory or their next facility and create the world's next high paying job here in the United States, that we should adopt the Irish corporate tax rate of 12.5 percent, down from the current rate of 35 percent. And, finally, to keep wealth in private hands in order to build capital that would be available for investments that create jobs and economic activity, Gingrich proposed once again the permanent abolition of the federal death tax.
The GOP's challenge, he said, was to present a program not to stimulate the American economy but to generate real economic growth driven by "investments to create permanent productivity increases to sustain permanent jobs." Raising taxes and boosting spending, he reminded the crowd, are not pathways to prosperity. If they were, high-tax, high-spending states like New York and California would have balanced budgets and people would not be leaving those states for low-tax environs in the South and Southwest.
Indeed, Gingrich is right. Lower tax rates on savings and investment to generate productive economic activity. Whether the GOP minority can develop legislation that can be introduced and voted on in this Congress is dependent on the whims of the Democrats' majorities in the House and Senate. But these ideas certainly do form the core of, as Gingrich used to refer back in the 1980s, an agenda worth voting for.
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