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In Two Years, the GOP Made the Economy Great Again

In 2018, there will be a host of gubernatorial, senatorial, and congressional elections with national ramifications. FDL Review has done a lot of reporting on individual races, and our "2018 Midterm" section has 25 posts. However, while we have spoken a lot about the "micro," we realized that we have yet to discuss the "macro."

Since we cannot possibly editorialize about every race in every state and in every district, a pressing question must remain for a plethora of FDL readers: "Why is it so imperative that I vote for the Republicans in 2018?"

President Trump with GOP leadership

The answer is quite simple: If you vote for Democratic candidates in statewide and national elections, you will be putting the financial vitality of the United States at stake. On the other hand, if you vote for Republicans, you will be allowing for the continuation of the Trump-era economic boom.

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While political strategists often warn against outlining past victories to voters who want to hear about candidates' plans for the future, the GOP should not forget to remind voters of its triumphs since November 2016. Republican success is most clearly demonstrable with regards to the American economy.

The GOP, initially fractured, immediately (and intelligently) united behind the pursuit of American economic revival. The Republicans have attacked the prevailing culture of "secular stagnation" through two distinct initiatives: tax reform legislation in the Congress and deregulatory efforts in the Executive Branch.

Speaker Ryan made reform a priority

The Tax Cuts and Jobs Act of 2017 reduced the corporate tax rate from 35% to 21%, making America -- which once had the highest statutory tax rate in the developed world -- more competitive on the global stage; simplified the tax filing process; incentivized small business creation; and cut taxes significantly for 80% of Americans. It was passed solely by Republicans with no Democratic support.

Some stated that the tax reduction would cause federal revenues to contract; instead, they have expanded, demonstrating the power of allowing business to flourish in a free-market system where the scope of government is restricted. As Calvin Coolidge, our 30th president, said,

That tax is theoretically best which interferes least with business. Every student knows that excessively high tax rates defeat their own purpose. They dry up that source of revenue and leave those paying lower rates to furnish all the taxes.

If Coolidge, who died in 1933, were still alive today, he would remind the Democrats of the fact that low rates of taxation allow for the mechanisms of industry to churn.

However, Democrats have ignored the logic behind the GOP's measures. Would-be Speaker Nancy Pelosi, who called the Tax Cuts and Jobs Act the "worst bill in the history of the United States Congress," stated that if the Democrats win the House of Representatives, they will repeal at least parts of the legislation.

Congressman Ro Khanna (D-California) went even further, saying, "We should repeal [the Tax Cuts and Jobs Act] and I think we should offer an alternative tax plan, which is we’re going to provide the tax relief to the middle class and the working class."

Had Khanna read some of the wisdom of Calvin Coolidge, he would know that "if the rates of large incomes are so high that they disappear, the small taxpayer will be left to bear the entire burden." Lowering the corporate and repatriation rates doesn't in turn increase the burden on the middle class; it stimulates the economy so that the middle class will (1) benefit from growth and (2) have to pay less taxes in the future thanks to an expanded revenue pool.

Laffer Curve

However, Khanna probably isn't the only member of the Democratic caucus who has ignored the words of our 30th president. His colleagues have proposed increasing the corporate tax rate to 30%, increasing the top tax rate from 37% to 39.6%, and resurrecting the alternative minimum tax (AMT), which hurt middle-class families. Such economic boondoggles show why the Democrats shouldn't have the keys to the city.

On the other hand, thanks to the Republicans, $400 billion in overseas money has already been repatriated, and another trillion is on the way. Americans are receiving dividends, literally and figuratively: Companies, both big and small, are giving employees raises, investing in new buildings, granting bonuses, and buying back stocks (rewarding investors stateside and allowing them to fuel economic growth).

All said and done, four million Americans have been directly uplifted by the corporate action following the Tax Cuts and Jobs Act.

The Tax Cuts and Jobs Act isn't the extent of the Republican success, however. From the White House, President Donald Trump has deregulated industry, allowing for companies to govern their own operations without being stunted by big government.

President Trump demonstrating regulatory growth

According to Investors' Business Daily, Trump "slashed the total number of pages in the Federal Register, the government's regulatory bible, from 95,894 in 2016 to 61,308 pages in 2017. That's a decline of 36% and the lowest since 1993. This year it will go even lower."

This action has a major impact. Also according to IBD, in 2012, "regulation cost small manufacturers just over $2 trillion, according to a study by NAM last year. That's $9,991 per employee every year just to comply with the rules government imposes. For all manufacturers, the cost is even higher: $19,564 per worker per year."

This is huge: The president is alleviating huge, unnecessary costs spurred by regulation, and in the process, he is unshackling enterprise and allowing it to prosper and pay dividends for all Americans.

As an effect of all of these anti-regulation initiatives (which are combined with lower taxation, wages have increased, the stock market is up (as demonstrated by various indexes), unemployment is at its lowest level since 1969, and GDP has grown at a rate of 2.9% since April 2017 (growth was 4.2% for the second quarter of 2018). For the third quarter of 2018, GDP growth is projected by the Atlanta Federal Reserve Bank to be 4.1%.

Manufacturing job growth under Trump

Under Trump, small business, consumer, and manufacturing optimism levels have consistently hit highs, and manufacturing job growth -- which declined under Obama -- is surging. The latter is directly attributed by Investors' Business Daily to deregulation.

Regarding small business optimism, according to the NFIB Research Foundation,

The NFIB Small Business Optimism Index soared to 108.8 in August, a new record in the survey’s 45-year history, topping the July 1983 highwater mark of 108. The record-breaking figure is driven by small business owners executing on the plans they’ve put in place due to dramatic changes in the nation’s economic policy.

The emphasis is mine, but note that the NFIB recognizes the value of the new national economic policy, which represents a "dramatic" shift from the policy of the Obama years.

Also under Trump and the GOP, black (5.9%) and Hispanic (4.5%) unemployment rates have hit all-time lows. This could explain the president's stratospheric 36% approval rating among black Americans: People recognize that the GOP's policies have aided Americans of all races and creeds.

If only the economic revival wasn't already delivering for  all Americans, the GOP plans to further turbocharge the economy if they keep the House of Representatives.

The Protecting Family and Small Business Tax Cuts Act, advanced by House Ways and Means Committee, would guarantee the permanency of the tax cuts for individuals, and The American Innovation Act would allow for the growth of start-ups through a $20,000 initial deduction.

On the other hand, the Democratic Party in power would mean a repeat of the 2009-2017 era: 1.58% GDP growth, which was the average for Obama's final five quarters; stagnant wage growth; and high unemployment levels, buttressed with the help of generous benefits for the unproductive.

Ultimately, if America gives Nancy Pelosi and Chuck Schumer the keys to the city, of the work of Donald Trump and the GOP leadership will have been for naught. 1.58% GDP growth would just about kill everything they’ve worked toward.

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Voting for Republican statewide candidates is also an essential proposition, as they have an impact on the economic conditions state-by-state.

For example, in Florida, Andrew Gillum -- nominated by the Democratic Party -- wants to increase the state corporate tax rate by over 40%, which would mean $1 billion in new taxation for Florida companies.

In Georgia, Democratic gubernatorial nominee Stacey Abrams called for $330 million in tax increases to finance programs with the intention of  instituting programs for "economic justice," according to The Atlanta Journal-Constitution.

And in Illinois, destroyed by high taxation, Democratic candidate J.B. Pritzer called for making the state income tax progressive and increasing it in the meantime. Even CBS betrayed that "Pritzker refuses to reveal his proposed tax rates for specific incomes, so no one knows, for sure, if the middle class will be spared."

Inversely, in Connecticut, which has been ravaged by liberal economic policies, Republican gubernatorial nominee Bob Stefanowski -- blessed by Dr. Arthur Laffer -- wants to phase out state corporate and individual taxes. These policies, if implemented, would revive Connecticut just as GOP policies have revived the national economy.

Additionally, in New York, incumbent Democrat Governor Andrew Cuomo is being challenged by Dutchess Executive Marc Molinaro, a Republican who supports unshackling New Yorkers from the iron hold of taxation.

Executive Marc Molinaro

Cuomo, when asked why New York was shedding population at a rate beat only by high-tax New Jersey and Illinois, blamed the weather. Molinaro, on the other hand, sees the culprit for what it is: high taxation and big government. He seeks a 30% property tax cut, the erasure of taxes on small manufacturers, and a cap on income taxes, among other legislative goals.

As demonstrated by these examples, voting for Republicans in statewide races allows for the implementation of policies that stimulate economic growth rather than decay. The latter, of course, is the modus operandi of the Democrats both in the states and on the national level.

Vote for the better prospect -- policies of growth -- on November 6, 2018 by casting your ballot for your local GOP slate.

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