In his Florida victory speech, Romney said, “If this election is a bidding war for who can promise more benefits, then I’m not your president.” Good. But he must build on that. He has to make it clear that when the unemployed return to work they will not face huge marginal tax rates. In other words, there must be an incentive to leave government dependency and move into the productive economy.
That’s why a bold tax-reform plan is so important. The unemployed face a 10 percent bottom tax rate. But the middle class faces 25, 28, and 33 percent tax rates. That’s way too much. Why not flatten the code to just two rates, say 15 and 25 percent, and then simplify by getting rid of the other brackets and wiping out the unnecessary deductions, credits, and carve-outs?
Such tax reform will not only provide growth incentives, it will provide anti-poverty incentives as well. Job creation for everyone.
People know Romney is a successful business man. And I suspect most folks think he understands the free-enterprise economy better than Obama. But they’re not sure he has a specific
plan that will translate his experience into real economic improvement for the whole country.
The same is true for the budget mess. Back in November, Romney put out an excellent statement on reforming entitlements, cutting $500 billion out of the budget by 2015, and getting spending down to 20 percent of GDP. It’s time he hit the reset button and started selling that plan all over again.
Railing against the Obama economy will not be enough to win. The latest jobs report shows a quickening pace of recovery: 243,000 nonfarm payrolls, 847,000 new jobs in the small-business household survey, and an 8.3 percent unemployment rate. Combine that with other strong readings on the manufacturing and non-manufacturing sectors (the ISM reports), car sales, chain-store sales, and jobless claims, and you have a 3 percent economy with good momentum.
Of course, coming from a very deep recession, growth and jobs should be better. The Reagan recovery was far stronger. But there’s no double-dip out there, and unemployment is not going back to 10 percent. So the trick for Mitt Romney is to show folks he has a detailed plan to make the economy and the budget better.
He needs to prove to people that he knows what to do and how to do it.
– Larry Kudlow, NRO’s economics editor, is host of CNBC’s The Kudlow Report and author of the daily web log, Kudlow’s Money Politic$.