Steve Forbes, chairman and editor-in-chief of Forbes Media, told Newsmax TV that it is crucial for Republican lawmakers’ survival to quickly forge a tax-cut plan that will benefit all Americans.
If not, the GOP stands to pay a very dear and steep price.
“I think Republicans in Congress are beginning to realize that if they don’t get a good growth tax cut through this year, they’re going to be pursuing many of the new opportunities after the elections next year,” Forbes told Sunday’s “The Income Generation Show.”
“So, they better get something done, because we’ve seen in the past when you have a good economy, a lot of sins are going to be forgiven when people feel good politically,” said Forbes, author of “Reviving America: How Repealing Obamacare, Replacing the Tax Code and Reforming The Fed will Restore Hope and Prosperity.”
“The key thing is you have to have everyone benefit. That was the genius of the John Kennedy tax cuts of the ‘60s, the Reagan tax cuts of the ‘80s was that they included everyone,” Forbes told host David Scranton.
“Some economists will make the case that increasing the standard deduction, for example, does not add much to boost the economy, but politically you have to do it. People have to feel right away they’re earning more,” said Forbes, a Republican candidate in the 1996 and 2000 Presidential primaries.
“They’ve got to do that because a lot of people, even if they end up paying income tax, like the idea that they keep more of their paycheck,” he said.
The key thing about reducing tax rates is not to just put more money in your pocket, he explained.
“The key thing is to reduce the price of innovating more, investing more, creating more, working more. And so if done right, it’s the gift that keeps on giving.,” he predicted.
“First, you get an immediate payback in the sense your paycheck goes up but by encouraging investment or removing barriers to investment, you get a more vibrant economy which means paychecks can increase on the top line not just the bottom line in the future,” he said.
Forbes also applauded the proposed simplicity of filing your taxes in the future.
“One of the real scandal of the current tax code is that the IRS estimates we spend 6 billion hours a year filing out tax forms. We spend $200-$400 billion complying with this monstrosity. Just go back 20 years. Imagine if all those resources had done to new products, new services, new cures for diseases how much better off all of us would be,” he said.
In a wide ranging conversation, Forbes touched on a variety of topics.
- He applauded the reduction of corporate taxes. “It would be a good thing. We, as you know today, we have the worst in the world. Thirty-five percent. Ireland’s among the major economies even though it’s a small country, is 12.5 percent. Getting ours down to 15 (percent) would be great.”
- He believes the American economy can truly flourish and become robust once again. “You get 4 percent growth over real growth over a 10-year period, it’s amazing what that compounded growth does in terms of revenue. We saw that in the ‘80s, we saw that in the ‘60s. I like revenue growing not because of higher taxes but because of a vibrant economy from lower and simplified taxes.”
- He criticized President Barack Obama’s attempt to rejuvenate the economy back to its full force. “When President Obama tried trickle-down economics, tried to goose the stock market, the bond market, and see if it trickles down, it doesn’t work. We want bottoms-up economics where the people, the entrepreneurs, grow the economy instead of the bureaucrats trying to grow it for us,” he said.
- Trump intends to undo all that Obama got wrong. “The way you get an economy moving is removing barriers from people who want to get things done,” he said, explaining that Trump intends to abolish high tax rates, excessive regulation and “crazy healthcare bills” imposed during Obama’s presidency. Trump “wants to tackle those things and in terms of how you get the growth, it’s investment,” he said.
“One of the tragedies in the last 10 years or so is how many small new businesses haven’t started as the huge obstacles out there, including the credit market that’s been messed up by the Federal Reserve in an unstable dollar,” Forbes said.
“And when the dollar’s strong or weak it’s like a clock that’s too fast or too slow. Neither one is going to be much good. So George Washington had it right, Alexander Hamilton had it right. Sensible taxation, minimal government involvement in the economy, and stable money. Really good things happen,” he said.
“Don’t punish success. Encourage it. Because Steve Jobs’ success is everyone’s success. Did anyone mind he had $10 or $20 billion, big airplane? No. they knew he created instruments that are now indispensable in our lives,” he said.