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In September, against the backdrop of state fiscal shortfalls and a bitter teachers’ union strike, the George W. Bush Institute continued its investigation of growth and tax policies in the unofficial capital of the Midwest — Chicago, Illinois. Headlined by Governor Mitch Daniels of Indiana, and featuring appearances by Margaret Spellings, David Booth, and Jimmy John Liautaud, two key themes emerged from the experts — tax uncertainty and inefficient government spending. American businesses and citizens need tax certainty. Whether putting together a five-year business forecast or managing a 401K retirement plan, a broad-based and long-term tax policy with low rates provides the stability and certainty that entrepreneurs and businesses need to invest and expand with confidence. As Bill Little, Chairman of the National Chamber Foundation posited, “Businesses learn to accommodate costs, and taxes are one cost. They work around it. They find a way. They price their product accordingly, whatever it might be, but the uncertainty is an enormous stifler of progress.” Dr. Michael Hicks, a professor of economics at Ball State University, went further in describing the danger of tax uncertainty: “I’m talking about bad uncertainty, and I think about the things like a shadow tax.” Hicks continued by comparing the extent of the problem Illinois faces vis-à-vis Indiana, saying: “Many people would be astonished. The unfunded liability for the city of Chicago is about $36,000 per resident. It’s about $1,800 per resident in Indiana.” Tax uncertainty at both the federal and state levels is holding back growth, but uncertainty is not the only problem. Government waste of tax dollars is making businesses and citizens uneasy, and they are starting to do something about it. Jimmy John Liautaud, the founder of Jimmy John’s Gourmet Sandwiches, told the crowd he is not only moving his family to Florida to escape the government waste of his personal tax dollars, he is also considering moving his company’s headquarters from Champaign, Illinois, to either Indiana or Texas next year due to the great waste of tax dollars in Illinois. Mr. Liautaud explained he didn’t mind paying taxes, but “what I mind is how they spend the tax. I would stay, but the way they spend the taxes is what’s really driving me away.” With all the political rhetoric pitting the ‘haves’ versus the ’have nots,’ it is refreshing to hear a successful businessman discuss how the issue is government wastefulness, and not who is paying a fair share. America needs a plan forward. Regardless of the outcome at the polls on November 6, the same tax uncertainties, government inefficiencies, and looming deficits will exist on November 7. Washington needs to come together and fix these problems. It’s the only way to get the economy back on a path of high growth and prosperity for all. This post was written by Michael McMahan, Program Manager for The 4% Growth Project at the George W. Bush Institute
Michael McMahan currently serves as Vice President of Corporate Planning and Development, overseeing all fundraising activities and events as well as integration of long-term revenue planning for Bush Institute and public programming work.
Previously, he worked as Vice President, Strategy and Planning. In this capacity he coordinated strategic planning and strategic partnerships across the Bush Center. He also worked as Director, Institute Policy and Planning and as Program Manager for the Bush Institute’s economic growth initiative.
McMahan is a licensed member of the Texas Bar, and prior to joining the Bush Center he was an energy law litigator. He served in the George W. Bush Administration at the U.S. Department of Energy in the Office of Policy and International Affairs. He is a graduate of the University of Texas (B.A., Economics) and Southern Methodist University’s Dedman School of Law (J.D.).
McMahan serves on the board of the Dallas Urban Debate Alliance and is a founding board member of the Dallas chapter of America’s Future Foundation.Full Bio
TARIFF-IED: Trade Talk with Matthew Rooney
This week, trade relations between the U.S. and India are continuing to escalate. Earlier this month, the U.S. stopped granting India special trade privileges by taking away the Generalized System of Preferences (GSP) program, and India has responded by enforcing more tariffs of its own. The George W. Bush-SMU Economic Growth Initiative Director Matthew Rooney breaks down the trade conflict: For more information on trade groups and the global economy, visit www.bushcenter.org/scorecard.
How Trade Spreads Holiday Cheer
It is projected that the average American household will spend more than $1,000 during the holidays this year.
Deporting Salvadorans May Lead to Economic Decline
We should think carefully about a policy whose major impacts are likely to be reductions in employment and economic activity here at home, and increased instability and lawlessness along our borders.
Bush Institute's Laura Collins Talks Immigration on Good Morning Texas
Last week, Deputy Director of Economic Growth at the George. W. Bush Institute Laura Collins spoke with Good Morning Texas about immigration myths. During the interview, Collins had the opportunity to set the record straight and address common misconceptions about legal immigrants living in America today. The segment was inspired from facts released earlier this fall by the Bush Institute in the third edition of America's Advantage: A Handbook on Immigration and Economic Growth. Watch the full Good Morning Texas interview here.