My fellow Americans,
In my campaign, I talked about lowering taxes and reforming regulations to help the economy grow and people get richer. My goal over these next four years, with Congress’s help, will be to do just that.
During the Great Recession Congress appropriated over a trillion dollars in stimulus funds and gave the unemployed 99 weeks of unemployment insurance. It didn’t have the desired result. Now, seven and a half years into the recovery, GDP growth is around 2 percent, the share of Americans employed or looking for work is at 1978 levels, and about 18 percent of adults are on food stamps.
During the campaign I laid out a better way, and I intend to devote my presidency to implementing it.
Let’s start with tax reform. There’s no reason for America to have the highest corporate tax rates in the industrialized world. No wonder that our multinationals keep over $2 trillion offshore. The Treasury is developing the reform plan I articulated during my campaign, to lower corporate and individual taxes.
As I’ve said before, in order to attract more businesses to locate in America and improve mobility we need competitive corporate tax rates. Our federal and state corporate tax rates, at 39 percent, are way above the 25 percent average of our industrial competitors.
Sweden and the U.K. both have combined federal and state rates of around 20 percent. I want to work with Congress to beat both of them—let’s go for a 15 percent rate. This means that more companies would come back to this country, creating jobs for Americans. More jobs—more upward mobility.
And hiring more Americans is what economic mobility is all about. Getting rid of barriers to entry, so anyone can work who wants to, would help people get their foot on the first rung of the career ladder. Then, if we increase GDP growth to a steady four percent rather than two percent, we would have more job openings so people could move up.
How can we help teens get their first foot on the career ladder? Rather than raising the minimum wage, I want to encourage all states to keep the Labor Department’s teen minimum wage--$4.25 an hour—to encourage employers to hire teens. Teens need jobs too, to teach them basic work skills. As recently as 1994, about 55 percent of 16- to 19-year-old workers sought employment. Now, it is about 33 percent. And the unemployment rate for teens is 15 percent. For African American teens, it’s 27 percent. This needs to change.
Next, I need Congress to help me dismantle Obamacare as fast as I can. I’ve already asked the Internal Revenue Service to accept tax returns without proof of insurance, and I’m waiving penalties for health insurance plans that do not comply with the Affordable Care Act.
I also plan to waive the employer penalty for not offering adequate health insurance. The penalty can be $2,000 per worker per year for businesses with more than 49 workers (the first 30 are exempt). So if you’re a small business owner with 49 workers, and you don’t offer the right kind of health insurance, you could face a fine of $40,000 a year for hiring that 50th employee. So you think long and hard about whether to expand above 49.
Obamacare has many unintended anti-employment consequences such as encouraging business owners to hire more part-time workers—those working less than 30 hours a week—without paying the fine. I’ve decided that’s no way to grow jobs in the economy. And without growth in jobs, there is no upward mobility.
Here in America we have numerous examples of corporate executives who started small. Just take two. GM’s new CEO Mary Barra began working at GM as a college intern. She worked her way up through numerous departments to the top job. And Doug McMillon, CEO of Walmart, started out unloading trucks at a Walmart distribution center. I’ve had great conversations with both of them as to how to get America going.
When I see poor children, I see future Americans bounded only by their own imagination. They may work their way up the corporate career ladder like Doug and Mary. Or they may decide to become a real estate developer like me, or a fashion designer, like Ivanka.
Whatever their choice, America has to help them rather than stand in their way. That’s what I pledge to all of you tonight. Good night, and God bless America.
Diana Furchtgott-Roth is a senior fellow and director of Economics21 at the Manhattan Institute. Follow her on Twitter here.
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