What are some ideas that would lead to faster economic growth? Regulating more intelligently would be a good place to start. No one denies that things like financial markets need some level of regulatory oversight. The idea of some libertarian free for all is a fringe concept. But, generally speaking, regulations should be simple to understand and there should be fewer of them. The idea that regulating too heavily hurts growth and leads to slower job creation tends to be rejected by liberals and stressed by conservatives. The answer is probably in the middle, but the middle agrees that governments have become too heavy handed, as evidenced by the overreaching of the IRS and the DC Taxicab Commission. We would like to see both the District and federal governments regulate with a lighter footprint.
Mayor Gray has created a regulatory task force to take a hard look at DC’s regulatory framework. We think this an excellent step and should be commended, but the proof is in the pudding. We urge the task force to apply an economic growth/job creation test to every facet of the city’s regulatory system. Does this regulation help or hinder economic growth? Does it make it easier to hire employees or more difficult? Those two questions should be asked of every regulation.
Changes to the structure of the DC and federal tax codes can also lead to faster economic growth. Incentivizing work is the number one way to accelerate growth. This would take the form of a simplified tax code that lowers marginal rates on wages for everyone who works. For lower income individuals it would mean an increase in the earned income tax credit. If you work, your marginal rates would decline or your tax credits would grow. Accelerated growth will more than cover the initial tax losses, but if you must offset the cost of lowering marginal rates, do that by making the tax code even more progressive.
Here is link to an excellent piece by Professor Jonathan Turley demonstrating just how heavy handed government has become.