Ideal Taxes Association

Raymond Richman       -       Jesse Richman       -       Howard Richman

 Richmans' Trade and Taxes Blog

An Economist's Plan to Increase Economic Growth And Create Jobs
Raymond Richman, 8/22/2015

Mortimer Zuckerman, Chairman and Editor-in-Chief of U.S. News and World Report asked in an opinion piece in the Wall St. Journal, 8/21/2015, “Who Will Get the Dreary Economy Going?” We face another recession on the horizon, he says. “Yet there is little urgency from the White House these days regarding the economy. And what is the focus of the current presidential candidates and the media covering them?” They are focused on Hillary’s email, on illegal immigration and immigration reform, overturning the Affordable Care Act, and a wide number of domestic issues none of which have anything to do with economic growth or increasing employment. Little has been accomplished since 2009. Millions are employed part time, millions have left the labor force and given up on finding a job. “..(W)hat we need is a public discussion of where, precisely, America is headed economically.”

The rest of this article is an attempt to show how economic growth can be stimulated, good jobs can be created, prosperity regained, and, as Donald Trump claims, America can be great again. This is what he and the other candidates can pledge to accomplish. 

  1. They should propose first and foremost balancing our international trade. My mentor Prof. Milton Friedman recommended that the U.S. adopt a free trade policy but at the time the USA was the world leading creditor. He would not be advocating a policy of free trade given our position as the world’s leading debtor and the fact that most of our leading trading partners are employing mercantilist policies intended to gain a trade surplus and grow their economies at the expense of the American worker. Trade deficits have cost us millions of American jobs, putting downward pressure on wages and living standards in the USA. There is a simple way to promote what all economists agree is beneficial to all trading partners, balanced trade. That policy is explained in a book of which I am a co-author, a single-country-variable-tariff, the so-called Scaled Tariff that is explained in the book, Balanced Trade (Lexington Books, 2014). The tariff goes up as a significant chronic  trade deficit with a trading partner increases but diminishes as the trade deficit is reduced, disappearing completely when trade is brought close to balance. Countries with whom trade is close to balance would not be affected. Only large countries with significant chronic surpluses in their trade with us would be affected. The tariff would raise the price of imports from the country to which it is applied but would yield substantial tariff revenues that would more than compensate for the high prices.
  2. End the multitude of inefficient government interventions in the private economy. These range from laws requiring all government contractors to pay union wages on all federal contracts, minimum wage laws, barring the export of American-produced oil, and a host of regulatory bodies from those created by the Dodd-Frank bill, to the Community Investment Act which forced banks to make sub-prime loans and led to the severity of the Great Recession.  (Incidentally, the first two mentioned, the Davis-Bacon Act are racist laws first enacted during FDR’s administration and urged on him by lily-white unions to prevent blacks from competing. Until the minimum-wage laws, blacks had lower unemployment rates and black families had a larger percentage of two parents than white families.
  3. Reduce federal government inefficiency and waste by eliminating some federal departments and agencies such as the Department of Education, the Department of Urban Housing and Development, the EPA, etc. Eliminate the property-trap laws that keep the blacks in urban ghettos and the poor in continued poverty. Education is a state function, cities and local governments are creatures of the States, and the EPA should be abolished and replaced by a law that prescribes environmental rules. Congress granted the executive numerous authorities which is an invitation to abuse, as the EPA has demonstrated, and to corruption. Eliminate regulatory bodies and similarly replace them by laws specifying the regulations. Congress should prescribe rules, not create authorities to implement its policies.
  4. Half of the revenue from the federal income and estate taxes should be distributed to the States in accordance with population. The 16th Amendment to the Constitution authorized the federal government to levy an income tax and changed the nature of our government giving enormous resources to the central government, transforming the U.S from a republic in which, under the 10th Amendment to the Constitution, all the powers not specifically granted to the federal government were reserved to the States or to the people. The federal government has become an all-powerful central government like all the European powers instead of the primacy of the state governments and the people as envisioned by the Constitution. 
  5. The corporate income tax whose top rate is the highest of any major country constitutes a severe handicap to American manufacturers competing internationally. Many of the Republican candidates favor reducing the rate of the tax. Economists are not even sure who bears the burden of the corporate income tax. Some believe corporations selling domestically are able to pass the burden of the tax to consumers. Corporations that export are unable to pass the tax to consumers because of the need to compete with their foreign competitors. Regardless of who bears the burden of the tax, it is one of the worst taxes from an equity point of view. Middle-class and small investors have their income from corporations taxed at very high rates when their rate of tax under the personal income tax may be much lower than the 39.6% that all of the large corporations pay. We believe corporate income should be taxed as partnership income is taxed, namely under the personal income tax. The corporation would pay no corporate income tax but would withhold personal income tax at a fixed rate, something that applied in Britain for centuries under the historic Income and Property Taxes. The effect because of the absence of any corporate income tax at all would make American manufacturers the most competitive in the world.

No doubt, other measures would contribute to growth and the creation of jobs, but these would go a long way to returning growth to the U.S. economy.

Your Name:

Post a Comment:

Comment by Ron V, 8/25/2015:

Your article said it in a nut shell.



  • Richmans' Blog    RSS
  • Our New Book - Balanced Trade
  • Buy Trading Away Our Future
  • Read Trading Away Our Future
  • Richmans' Commentaries
  • ITA Working Papers
  • ITA on Facebook
  • Contact Us

    Jan 2022
    Dec 2021
    Nov 2021
    Oct 2021
    Sep 2021
    May 2021
    Apr 2021
    Feb 2021
    Jan 2021
    Dec 2020
    Nov 2020
    Oct 2020
    Jul 2020
    Jun 2020
    May 2020
    Apr 2020
    Mar 2020
    Dec 2019
    Nov 2019
    Oct 2019
    Sep 2019
    Aug 2019
    Jun 2019
    May 2019
    Apr 2019
    Mar 2019
    Feb 2019
    Jan 2019
    Dec 2018
    Nov 2018
    Aug 2018
    Jul 2018
    Jun 2018
    May 2018
    Apr 2018
    Mar 2018
    Feb 2018
    Dec 2017
    Nov 2017
    Oct 2017
    Sep 2017
    Aug 2017
    Jul 2017
    Jun 2017
    May 2017
    Apr 2017
    Mar 2017
    Feb 2017
    Jan 2017
    Dec 2016
    Nov 2016
    Oct 2016
    Sep 2016
    Aug 2016
    Jul 2016
    Jun 2016
    May 2016
    Apr 2016
    Mar 2016
    Feb 2016
    Jan 2016
    Dec 2015
    Nov 2015
    Oct 2015
    Sep 2015
    Aug 2015

    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    February 2014
    January 2014
    December 2013
    November 2013
    October 2013
    September 2013
    August 2013
    July 2013
    June 2013
    May 2013
    April 2013
    March 2013
    February 2013
    January 2013
    December 2012
    November 2012
    October 2012
    September 2012
    August 2012
    July 2012
    June 2012
    May 2012
    April 2012
    March 2012
    February 2012
    January 2012
    December 2011
    November 2011
    October 2011
    September 2011
    August 2011
    July 2011
    June 2011
    May 2011
    April 2011
    March 2011
    February 2011
    January 2011
    December 2010
    November 2010
    October 2010
    September 2010
    August 2010
    July 2010
    June 2010
    May 2010
    April 2010
    March 2010
    February 2010
    January 2010

    Book Reviews
    Capital Gains Taxation
    Corporate Income Tax
    Consumption Taxes
    Economy - Long Term
    Economy - Short Term

    Environmental Regulation
    Last 100 Years
    Real Estate Taxation

    Outside Links:

  • American Economic Alert
  • American Jobs Alliance
  • Angry Bear Blog
  • Economy in Crisis
  • Econbrowser
  • Emmanuel Goldstein's Blog
  • Levy Economics Institute
  • McKeever Institute
  • Michael Pettis Blog
  • Naked Capitalism
  • Natural Born Conservative
  • Science & Public Policy Inst.
  • Votersway Blog
  • Watt's Up With That


  • [An] extensive argument for balanced trade, and a program to achieve balanced trade is presented in Trading Away Our Future, by Raymond Richman, Howard Richman and Jesse Richman. “A minimum standard for ensuring that trade does benefit all is that trade should be relatively in balance.” [Balanced Trade entry]

    Journal of Economic Literature:

  • [Trading Away Our Future] Examines the costs and benefits of U.S. trade and tax policies. Discusses why trade deficits matter; root of the trade deficit; the “ostrich” and “eagles” attitudes; how to balance trade; taxation of capital gains; the real estate tax; the corporate income tax; solving the low savings problem; how to protect one’s assets; and a program for a strong America....

    Atlantic Economic Journal:

  • In Trading Away Our Future   Richman ... advocates the immediate adoption of a set of public policy proposal designed to reduce the trade deficit and increase domestic savings.... the set of public policy proposals is a wake-up call... [February 17, 2009 review by T.H. Cate]