The U.S. Growth Presidency Memo

The Growth Commission has outlined a set of proposals centered on tax, fiscal, trade and regulatory policy that, if enacted by the Administration of President-elect Donald J. Trump, would maximise U.S. GDP per capita gains in the coming years.

While U.S. economic growth has been more robust than equivalent G7 members over the last 25 years, it has still maintained an overall GDP growth rate which is substantially below the fastest growing regions of the world. The proposals presented today in the Growth Presidency Memo – which have been subject to robust economic modelling – would generate the much-desired improvement in GDP per capita, which is the best measure of whether American families feel better off and more prosperous.

The policy proposals in the Growth Presidency Memo compiled by the independent non-political international economists comprising the Growth Commission include:

• Reintroducing major portions of the Tax Cuts and Jobs Act of 2017 that were enacted on a temporary basis and are currently scheduled to be phased out, including:
  • Restoring full immediate expensing for machinery and other short-lived assets
  • Extending the benefits of full expensing to structures, including commercial real estate, plants, residential buildings, farm structures and transport infrastructure
  • Restoring the expensing of R&D
  • Reducing the corporate tax rate to 15%
• Delivering a comprehensive programme of regulatory reform including:
  • Reissuing the Executive Order that made executive branch agencies eliminate two regulations for each new one adopted
  • Evaluating Biden-era executive orders that imposed excessive burdens on the private sector and fail a cost-benefit test for possible redrafting or total rescission
  • Requiring “independent agencies” within the executive branch to consider cost-benefit analysis in promulgating any rules, regulations or other decisions from a competition standpoint
• Pursuing a trade policy which:
  • Introduces forensic and targeted tariffs on products produced by countries like China where practices such as intellectual property theft, state subsidies and other market distortions for key industries have artificially reduced the cost of production and directly caused damage to U.S. firms
  • Embraces a foreign-market-opening trade agenda, including deals with key allies such as the UK or having such allies accede to or “dock on” to the United States-Mexico-Canada Agreement
• Avoiding the energy policy mistakes of the UK and much of Western Europe whose attachment to Net Zero policies has resulted in soaring energy costs for consumers and businesses alike
• Adopting an undistorted, innovation-enhancing, pro-competitive industrial policy that creates a good entrepreneurial ecosystem that allows all firms to compete on an equal footing and exploit new technologies and business models
• Using targeted economic tools – rather than economically counterproductive national security tools – to deal with economic problems

Our modelling shows that taking our proposals together would see an enhancement of between two per cent and four per cent in GDP per capita over a ten-year window – potentially yielding as much as a 42 per cent GDP per capita increase over the next decade, which is approximately $110,000 GDP per capita for the U.S. in 2024 dollars.

Presenting the report following the re-election of U.S. President-elect Donald J. Trump, Commission Chairman Shanker A. Singham said:

“Any rise in regulation slows economic growth and reduces increments to per capita GDP, which makes everybody feel poorer. This is what the U.S. has seen over the last four years. This is why we propose a regulatory reform programme focused on reducing the burdens and distortive effects of regulations which we are confident would pay substantial economic growth dividends.

“Dealing with China is perhaps the most pressing economic and national security challenge the U.S. faces. We suggest a tariffication mechanism, targeted to the market distortions that can be shown to damage trade and competition.

“The policies we are proposing today will generate growth and we are looking forward to discussing and sharing these ideas with the incoming Administration.”

Growth Commissioner Stephen J. Entin added:

“The expiring provisions of the 2017 Tax Cuts and Jobs Act include some measures that have been proven to be particularly effective in encouraging capital formation, productivity gains and higher wages. Reintroducing those measures, reducing the write-off life for structures and further reducing the corporate tax rate will provide a significant boost to the U.S. economy.”

The report can be read in full here.