Romney Tax Plan Can Fuel Economic Growth

Thursday, 18 Oct 2012 02:22 PM

By Henry J. Reske and Kathleen Walter

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GOP presidential candidate Mitt Romney’s plan to cut individual tax rates by 20-percent, eliminate the estate tax and the Alternative Minimum Tax, and extend the Bush tax cuts can fuel economic growth while remaining revenue neutral, Forbes contributor Travis Brown tells Newsmax TV.

Travis, an expert on state tax policy and president of “Let Voters Decide,” a coalition that supports state tax reform, was asked in an exclusive interview if Romney’s proposals will deliver.

Video to come.

“They can and, in fact, there’s much debate about that throughout the last few weeks and over the next few as well,” he said. “What we know from many economists looking at many decades of evidence is that when you can lower marginal tax rates, you see economic expansion. That’s part of the reason that the Romney administration is looking seriously at how to get back to at least three or four percent GDP growth in this country. It’s absolutely important that we increase that growth. We know we can only do that in one way which is private sector investment.”

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Brown said that Romney and President Barack Obama have two “very different views about how to approach this problem.”

“As we’ve said, we need private sector investment and that comes from private sector growth,” he said. “Many Americans understand and can see through that the policies of more spending without corrections and controls are going to result in more of the same and it’s incumbent on America to take a look and simplify the tax code and make it a stronger position for all working Americans in the next few years. If we don’t do that, there’s many people concerned about the direction of this country.”

Brown said that much of the innovation and change in tax law was occurring in the states, long known as the “laboratories of democracy.” He added that taxing personal income doesn’t work for economic expansion.

“We know that the nine no-income tax states today are outperforming the other 41,” he said. “So we have really strong evidence of what works. We have recent actions by governors, such as Gov. Sam Brownback of Kansas, that have basically zeroed out following the model to be more like Texas for jobs and less like California for higher taxes and that’s encouraging for many others … because we’d like to see real economic expansion among the states.

“You also have ballot initiatives happening in New Hampshire in just two weeks trying to make permanent that in no circumstances would their state government tax personal income on things like lottery winnings. So there are many important issues that start in the states and can drive and inspire even change in Washington based on actual evidence, working knowledge of what creates jobs.”

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Brown said that currently the best states for not taxing personal income are Texas, Florida, Tennessee, Washington state, and New Hampshire.

“The worst offenders, the regions that are losing the most wealth to those other environments, would include New York, Illinois, California and states around them that also have marginal tax rates relatively high,” he added.

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