Wednesday, May 7, 2008

Gingrich's, Huckabee's, and our recommendations for the future of the GOP

In a commentary published in Human Events yesterday, former House Speaker Newt Gingrich wrote "It's time for Real Change to Avoid Real Disaster." After pointing to Republican electoral losses in recent elections, he recommended that the congressional Republicans put together their own plan for change.

Gingrich is correct. The GOP needs to define itself with a new program. The old GOP economic program has left the US economy in shambles. It included:
  1. Letting foreigners steal our industries in the name of free trade
  2. Giving foreigners special tax breaks to induce them to lend us money
  3. Cutting capital gains taxes as give-aways to their rich constituents
  4. Lowering taxes without lowering government spending
Here are Gingrich's recommendations:

Gingrich Program
  1. Repeal the gas tax for the summer, and pay for the repeal by cutting domestic discretionary spending.
  2. Redirect the oil being put into the national petroleum reserve onto the open market.
  3. Introduce a "more energy at lower cost with less environmental damage and greater national security bill" as a replacement for the Warner-Lieberman "tax and trade" bill.
  4. Establish an earmark moratorium for one year and pledge to uphold the presidential veto of bills with earmarks through the end of 2009.
  5. Overhaul the census and cut its budget radically.
  6. Implement a space-based, GPS-style air traffic control system.
  7. Declare English the official language of government.
  8. Protect the workers' right to a secret ballot.
  9. Remind Americans that judges matter.
While some of these are good ideas, they lack coherence and vision. Governor Huckabee's program as expressed in the Mission Statement of Huck PAC are much more coherent.

Huckabee Program
  1. Tax reform
  2. A strong national defense
  3. Real border security
  4. Life
  5. The family
  6. Less government
  7. Individual liberty
Huckabee's program is basically a program for real structural reform in our tax system, putting America first at our borders, and strengthening America's commitment to life, liberty, and family. He advocated the FairTax during his election campaign, but he is open to other tax reforms as well. My father, son, and I propose many specific tax reforms, including the FairTax, in our book Trading Away Our Future

Richman Tax Reforms
  1. Adopt Import Certificates to balance trade in order to put an end to the mercantilist practices by foreign governments that are stealing American industries and leading to our eventual impoverishment.
  2. Adopt the FairTax or some other border-adjustable, progressive consumption tax in order to enhance American domestic savings and growth and to encourage American exports while discouraging imports.
  3. Close the foreign-savings tax loopholes that let non-resident foreigners and foreign governments, but not Americans, earn tax free interest and lower tax rates on dividend income. Americans should be able to earn the same income as foreigners from American investments. (If the FairTax is adopted, the same could be accomplished by withholding the FairTax from income paid to non-resident foreigners.)
  4. End the lower rate of taxation of capital gains than other income, but at the same time postpone taxation of re-invested capital until it is consumed. This will end the practice by corporations of buying-back their stock instead of investing their profits. (The FairTax would do this automatically.)
  5. In order to revitalize the housing market, assess properties when sold and not thereafter and limit milage increases to the rate of inflation. In other words, move to a Proposition 13 real-estate tax system (with a homestead exemption to make it progressive).
  6. Eliminate the corporate income tax, a tax that reduces investment and economic growth. Substitute a Value-Added Tax simply on the products involved in trade. The border-adjustable Value-Added Tax would discourage imports without taxing American exports. (If the FairTax is adopted, it would have the same effect.)
If the GOP were to adopt the Huckabee plan with the Richman addendum, then it would become a party that put the interests of America before the interests of foreigners. The implementation of the plan would produce a resurgence of the American economy and a renewal of the American commitment to life, liberty, and family.


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