Sen. Tim Scott, R-S.C., on Thursday advocated for slicing taxes and slashing authorities spending, together with focusing on welfare applications, as a part of his presidential marketing campaign’s new economic plan.
Scott, touting his new plan on CNBC’s “Squawk Box,” argued that his system would in the end usher extra money into the nation’s coffers.
“I imagine the Laffer curve nonetheless works, frankly,” Scott mentioned.
He was referring to conservative economist Art Laffer’s controversial concept that helped popularize the view that slicing taxes will unleash sufficient further financial exercise to generate a rise in tax income.
Lowering taxes “creates and encourages capital to come off the sidelines, and when that occurs you see development to the income within the Treasury,” Scott mentioned.
“We noticed that in 2019, we noticed it in 2018. I imagine that if we reduce taxes once more we’ll see that very same trajectory that can stimulate development in our financial system,” he mentioned.
His plan goals to make everlasting the tax cuts that had been signed into law in 2017 by then-President Donald Trump. Those provisions are set to expire in 2025.
The Laffer curve, reportedly conceived on a cocktail serviette within the Seventies, has been embraced by many in mainstream Republican circles, although its many critics will be aware that each conservative and liberal economists have assailed the speculation.
When challenged on whether or not that predicted bump in income could be sufficient to cowl the loss created by the tax cuts themselves, Scott argued that the issue was overspending.
“It’s not merely a income downside, it is a spending downside,” he mentioned on CNBC, noting that his plan goals to rein in non-defense discretionary spending to pre-pandemic ranges.
Scott’s plan would rescind the Inflation Reduction Act, the sweeping spending law that President Joe Biden contends has been important to the inflation charge’s decline over the previous 12 months.
He would additionally impose “welfare reform work necessities,” arguing it’ll “scale back our spending on welfare applications by encouraging work.”
“In America, in case you’re able-bodied, it is best to work,” Scott mentioned.
Scott is constantly caught within the low-to-mid single digits in nationwide polls of the Republican major race.