The GOP Business Debate: A Review

This week in Milwaukee, the frontrunners of the Republican Party gathered for an evening of intellectual discussion about the American economy. Our business editor reviews the result

The Fox Business/WSJ Republican Frontrunner's Debate. Image DonkeyHotey

The Fox Business/WSJ Republican Frontrunner’s Business Debate. Image DonkeyHotey

This week in Milwaukee, the frontrunners of the Republican Party gathered for an evening of intellectual discussion about the American economy. The hosts, the ever-reliable Fox Business, promised the audience a debate about policy not personality. So with some trepidation I sat down and watched. I rapidly realised that my apprehension was well founded.

The debate started in earnest and on the most American of topics, tax. So in true American fashion, the mediator kicked off by asking Ben Carson, the mild mannered neurosurgeon, whether his comments about God’s fairness and taxes would mean his reform proposals would be endorsed by the Lord Almighty. As God was unavailable for comment, Carson stepped up and told the audience that a 15% flat tax rate was fairer, charity would increase and America would still be the spellbinding land of dreams.

Ted Cruz, following on the religious theme told a shocked audience that the IRS tax code had more words than the Bible proclaiming he’d cut taxes to 14.5% and abolish the IRS. A big round of applause for Mr Cruz, and the two central tenets of the American right – God and taxes mentioned within the first 5 minutes. But what is the monstrous crippling tax burden they all zealously discuss? 

We in Britain are used to a minimum of 20% tax rate going up to 45% after £150,000, but think of the poor American taxpayer stuck under a mountain of federal taxes. ‘Don’t tread on me’ you might think. On average, according to the independent Tax Policy Centre, the effective tax rate for the majority of Americans earning the average household income of $50,500 is 16%. For the wealthiest 0.1% the tax rate is around 35%. When I was fortunate enough to visit Boston a few years ago, a lady explained that the State 8% sales tax was appalling and when we mentioned VAT of 20%, she couldn’t understand why we weren’t rebelling and dumping tea into a large harbour.  It appears that the U.S is the only country in the Western World where the right wing appears to be united in the belief that taxes for everyone should be under 15%, including the wealthiest.

After the debaters established that the American public were being trampled by Uncle Sam and his enormous tax burden, the debate entered into matter of funding the military. Marco Rubio decided that increasing the spending for the military was a very pressing issue and his impassioned defence prompted both fear and bewilderment on my part. Rubio rounded on the figure of $1trillion over 4 years which made small-statist Rand Paul go a whiter shade of pale. Rubio then went on to say America should militarily intervene more, not less in global affairs. Clearly as Iraq was such a glittering success for U.S Interventionism, we shouldn’t be concerned about Rubio being Commander-in-Chief. Indeed, Rubio made Jeb Bush look positively moderate in the sabre-rattling department, which is worrying given the Bush family history on Middle Eastern jaunts with the U.S Army.

Everyone’s favourite Donald ‘I started with only a million from Daddy’ Trump fully endorsed strengthening the already colossal U.S military budget to make sure America was still great. This is despite the U.S spending more on defence than the next 10 highest spending countries, 8 of whom are allies.

Once tax and military spending was dealt with it, the GOP candidates moved swiftly but briefly onto banking and Wall St. Carly Forina, an ex Hewlett Packard CEO, worried that socialism was rapidly encroaching with overregulation ruining the banking sector. Trump largely echoed the concerns of Forina and Ted Cruz decided that it should be back to the 70s (the 1870s) with a reintroduction of the Gold Standard. All the candidates seemed to agree that government regulation of Wall St should be limited, with several calling for the post-2008 crisis regulations – the Dodd Frank Act – to be scrapped.

The likely outcome of the GOP debates is the selection of the most moderate candidate. Unfortunately, as no kind soul has emerged to take up this title, we must wait with bated breath otherwise I predict an awkward time for Republican Party in 2016.

Leave a comment