Tax Policies for 4% Growth: Evidence From the States, American History, Markets, and Nations ––––––––––––––– ––––––––––––––– APRIL 10, 2012 | NEW YORK ––––––––––––––– ––––––––––––––– Transcript by PremierTranscription.com Tax Policies for 4% Growth: Evidence From the States, American History, Markets, and Nations ––––––––––––––– ––––––––––––––– APRIL 10, 2012 | NEW YORK ––––––––––––––– ––––––––––––––– Emcee: Ladies and gentlemen, please welcome the President of the George W. Bush Foundation, the Honorable Mark Langdale. Honorable Mark Langdale: Good morning. Welcome to the New York Historic Society. Three years ago, President Bush and Laura Bush came home to Texas, and they started writing their books. They also started the development of the George W. Bush Presidential Center on the campus of Southern Methodist University. It’s designed by New York’s own Robert A.M. Stern. It’s a beautiful building that will be finished at the end of the year. A year from now, in April, we will dedicate the building at a ceremony in Dallas, and half the building will be given to the federal government to be the permanent home of the George W. Bush Presidential Library and Museum. It’ll be a place where people can come and study and learn about the presidency of George W. Bush and he and Laura’s public service. The other half of the building will become the permanent home of the George W. Bush Institute. The institute has also been working for three years, started up by President Bush and Laura Bush to be a platform for the continuing service on issues that they’re really interested in. For the last three years we have launched a program to eradicate cervical cancer on the continent of Africa. We’ve worked to empower women in the Middle East to be an agent of change there. We’ve worked to inspire and document the work of dissidents who are trying to bring freedom to their home countries, and today we launch or continue the launch of our economic growth perspective in the 4 percent growth area. I’d like to especially recognize today a couple of members who have helped bring the institute and the center along: our Chairman of the Board, Donald Evans here, board member Craig Stapleton, Karl Rove and Edward Lazear, who are on the board of our institute, guiding what happens and what we work on with the institute, and Dean Al Niemi, who will be on a panel later today. SMU has been a great partner of ours as we build the center at SMU. So at the time, I’d like to introduce to you the founding Director of the George W. Bush Institute, a smart and busy man, James K. Glassman. Honorable James Glassman: Thank you. Thank you, Mark. Good morning, everyone. This conference was conceived and organized by Amity Shlaes, a Senior Fellow of the Bush Institute and Director of our 4% Growth Project. We launched that project a year ago at a major conference in Dallas that included four winners of the Nobel Prize in Economics. The project’s goal is to research, discover and promote ways for the United States to achieve sustainable, real 4 percent growth or about twice the rate that’s now being projected by many economists for the United States. We want to change the conversation in America so that it centers on growth. You’ll hear from Amity on a panel later today, but in the meantime, let me try to channel her. Amity has been saying now, for the five months that this conference has been in the works, that this is not going to be a boring conference. It is, at its core, about competition. People like competition. It’s fun. That’s why people go to baseball games. Tax competition is a reality, yet the tax debate usually ignores competition, and many analysts just disapprove of it. We don’t. We like it. We think it’s exciting and uplifting, and everybody gains. Competition makes the global pie bigger, but there’s no doubt that bigger national and state incentives make a bigger slice of that pie at home. George W. Bush Presidential Center Page 2 of 90 Tax Policies for 4% Growth New York | 04-10-12 People say economics is the dismal science. It is not. It’s actually a happy science, because it is the science of choice, and at its core, choice is all about human freedom. Economics is about the decisions that people make and the incentives that drive those decisions. Public policy plays a key role in determining the incentives, and tax policy is the most powerful of those public policies. The way it’s structured can get people to work more or less, to invest more or less, to start more or fewer new firms and expand more or fewer current ones. In Europe, people work a full one-third less than we do, and the Nobel Economist Edward Prescott, who presented at our conference in Dallas, has shown that the reason isn’t culture. It isn’t climate. It’s the marginal tax rate. Nations and states that want to work more and invest more and thus have more opportunity and prosperity understand that they are in a global and national tax competition, as we’re going to see today. In a way, much of what we will be doing today is looking from results to causes. So if strong growth is the desired end, we ask the question who grows. We’ll look at countries, at states, at America at different times in its history. There are places and times where growth has been particularly strong. We want to know whether tax policies are at the root of that success and which tax policies. The governors who are here with us today understand the incentives that produce growth. Governor Haslam’s state of Tennessee already has no personal state income tax, and that may be the reason that his state has outstripped his neighbor, Missouri, which does have such a tax, in personal income and GDP and in employment. The governors of Kansas, Oklahoma, Maine and New Jersey, who are also here with us today, are all moving to cut their state’s tax rates. They understand the power of incentives and competition. In the two panels that follow the opening addresses, we will turn the spotlight on state taxes and what they mean to state growth and to national growth. These sessions will be followed by a panel on international tax competition and one on the U.S. government record on taxes throughout history and conclusions we can draw from it. Next, we’ll break for lunch, followed by an address by Representative Paul Ryan, then panels on markets and taxes, on the real life impact of taxes on the people who run businesses, and then we’ll look at what we’ve learned in a star-studded panel called Blitz Solutions, what we should do, in a practical sense, to win the tax competition. Then we’ll close with a reception sponsored by the U.S. Chamber of Commerce. I’d like to thank the Chamber for its sponsorship of this event, as well as our other sponsors, the Bosarge Family Foundation, Jean and Rex Sinquefield and Tina and Byron Trott and our media partner Forbes. We are a Dallas-based organization. We like being in the Heartland of America. So what on Earth are we doing here in New York? Not only is this the white-hot center of business and finance in the United States. It’s a city built on global trade, innovation and competition, and what better place for this conference than the New York Historical Society, founded in 1804 with deep roots in the commerce of this city? And also with deep roots in the commerce of this city is our next speaker, Steve Forbes. Steve’s grandfather, B.C. Forbes, was a journalist who immigrated to New York from Scotland and started a great eponymous business magazine that he presided over for 37 years and passed on to his talented son Malcolm. Today under Steve Forbes, with its international editions, Forbes has a circulation of more than six million. Steve has successfully led the company’s transition to the Internet age with Forbes.com, with 25 million unique monthly visitors and websites in the Real Clear family. Steve served under President George H. W. Bush as Chairman of the Board of International Broadcasting, and in both 1996 and 2000, he sought the Republican nomination for President, running on a principle platform, focused on growth, driven by low marginal tax rates. In 2000, he ran third in the New Hampshire primary and second in the Iowa caucuses, and I can’t for the life of me remember who beat him. George W. Bush Presidential Center Page 3 of 90 Tax Policies for 4% Growth New York | 04-10-12 Speaking of happy, which is what we want this conference to be, there is no happier campaigner, no more optimistic campaigner for freedom and growth than Steve Forbes. Steve. Steve Forbes: Well, thank you very much, Jim, for those very kind words, and thank everyone with the Bush Institute for making today possible. This meeting couldn’t be more timely, and even though I tried to do something in 2000, obviously it didn’t work, which is why I’m doing the introducing today, but it is a great honor. We should recall President Bush’s two tax cuts, particularly the big one in 2003. Many people today don’t remember that President Bush inherited a faltering economy when he came into office.