According to Gallup, President Obama?s approval rating in the third quarter of 2011 averaged 41%, a new quarterly low. That adds to the thought that the winner of the GOP presidential primary sweepstakes is going to be the next president.
And inside that Republican contest, the policy pendulum is swinging toward pro-growth, flat-tax reform. A new agenda. With Herman Cain?s 9-9-9 plan and the announcement of a Steve Forbes-type flat tax from Gov. Rick Perry, the GOP flat-tax-reform competition is dominating the headline news.
While President Obama stumps for huge tax hikes ? on incomes of $200,000 to the millionaire and billionaire levels ? and demoralizes businesses and entrepreneurs with his populist attacks on success and risk-taking, the GOP is fast coming up with a much better idea.
The handwriting is now on the wall. A huge part of the 2012 campaign will be pro-growth tax reform versus ?fairness,? redistribution and soak-the-rich. In a stalled-out economy, I?ll take the supply-side bet anytime. Pro-growth, flat-tax reform is going to win.
The stock market gets this. The flat tax is bullish. In late September, Herman Cain trumpeted his 9-9-9 flat-tax/fair-tax hybrid reform plan at the Orlando, Fla., debate. Since early October, stocks have come out of their funk, rising 12 percent.
Coincidence?
Part of the stock rally is based on strong corporate earnings, the mother?s milk of stocks. So far for the third quarter, almost three-quarters of reporting companies have beaten estimates, with overall profits coming in about 14 percent ahead of year-ago. And investors are hopeful that? Europe will solve its sovereign-debt and banking woes.
But the sudden stock rally could also be discounting a new GOP growth plan that will replace the dreary Obama tax-the-rich mantra.
Investors read the political polls as well as the earnings results. And investors sense that a rejuvenated Republican Party ? with candidates competing for the most pro-growth, incentive-oriented tax reform ? bodes well for America?s economic future. So with the election a little more than a year away, stocks may be thinking about a new Reagan-like era in economic policy.
An era when success is rewarded, not punished. An era when consumption is taxed more while savings and investment are taxed less. An era when capital formation rises from the ashes to produce a new surge in productivity, jobs and real incomes. An era when simplicity trumps $450 billion in compliance costs; when a new Republican party means business when it says it will drive a stake through a tax code that has been a ball-and-chain to the economy.
Add to that widespread agreement among the GOP candidates for strict spending limitations; a regulatory rollback; an unleashing of America?s oil-and-gas shale revolution (which will give us energy independence); and the likelihood that a Republican president will stop the Federal Reserve from devaluing the dollar and flooding the financial system with an overload of new money. All the GOP frontrunners would replace Ben Bernanke, and at least Cain and Perry have hinted at re-linking the dollar to gold.
And all these policies mark a return to the Reaganesque principles that rejuvenated free-market capitalism 30 years ago and could ignite an economic-growth surge once again ? even amidst all of today?s doom and gloom.
Continued on Page 2 >>
Source: http://dailycaller.com/2011/10/22/the-gop-pro-growth-flat-tax-competition/
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