WASHINGTON — Republican presidential candidate John Kasich on Thursday pledged to balance the federal budget in eight years and roll out a robust economic growth plan that would cut corporate and individual tax rates, bring more investment and jobs back to the U.S. and rein in federal regulations.
Kasich, currently governor of Ohio, participated in a teleforum and addressed questions posed by members of the National Retail Federation; National Association of Manufacturers; Associated Builders and Contractors; the Associated General Contractors; the Business-Industry Political Action Committee, and the National Federation of Independent Business.
Kasich’s plan includes cutting the corporate tax rate to 25 percent from the current 35 percent, reducing the top individual tax rate to 28 percent from 39.6 percent and lowering the capital gains rate to 15 percent. His program would also allow companies to repatriate profits from abroad at a low rate and allow businesses to write off equipment expensing in one year, according to a fact sheet on his Web site.
He said he would couple tax reform and breaks with restraining government spending and putting a freeze on all federal regulations, with the exception of health and safety rules, for one year.
“All that together would get us to a balanced budget, our projections show, within eight years,” Kasich said. “It would provide certainty; it would deal with regulatory problems; the high taxation of big corporations, and [give] a 28 percent income tax rate to individuals, which would of course also help small businesses.”
Kasich said, if enacted, his economic plan would lead to an estimated economic growth of 3.9 percent.
One business executive asked Kasich how American industry can bring back to the U.S. “millions and trillions of dollars” that have left the country for low-cost manufacturing countries that subsidize industries.
“These issues of international competitiveness have always been around,” Kasich said. “First of all, we see a lot of inversion going on today because companies are trying to avoid the sky-high corporate tax rate. That tax rate needs to be reduced.”
He also noted that when companies have entities in foreign countries and pay taxes in that country, they should not be taxed heavily when they bring profits back to the U.S.
“Companies that have assets trapped in Europe, for example, begin to invest in entities in Europe rather than in the U.S. I don’t like that. It doesn’t make any sense,” he said.
On trade, Kasich said he believes in expanding foreign markets for U.S. goods, reducing trade barriers and attracting more foreign investment to create more jobs at home. He said in Ohio, there have been significant investments in manufacturing from Thai, Chinese and Mexican companies.
High transportation costs and low energy costs in the U.S. have drawn more investment back, he added.
“We do not want to lose the ability to make things in this county,” Kasich said. “I’m optimistic about the future in terms of the ability to have a significant amount of manufacturing companies located in the Midwest.”
In the area of regulations, Kasich said he would repeal mandates in the Affordable Care Act and conduct a serious review of the sweeping financial regulatory reform law known as the Dodd-Frank Act, and review and likely repeal rules issued by the Environmental Protection Agency.
Kasich has proposed freezing all new federal regulations for a year, conducting reviews of existing regulations and replacing agency staff reviews of rule-making with an independent body to conduct reviews and hear appeals from smaller businesses adversely impacted by proposed regulations, according to the fact sheet. He would also require Congressional approval for any regulations costing the economy more than $100 million.
“I think regulatory burdens can become very oppressive,” Kasich said. “Not only would I like to freeze all federal regulations for a year, but I would begin looking at how we would reverse some of the things that have become so burdensome on the people who are the job creators.
“I would create independent entities across the government that can take your side to battle against the bureaucracy if we find that some of these rules are just ridiculous,” Kasich added. “I think the regulatory side of this with the bureaucracy that runs amok needs to be halted. If you are not sensitive to the fact that regulations can kill jobs then you really don’t understand how this economy works.”