Trump will cut tax rates and reduce regulations

On September 15, 2016, Donald Trump announced his economic plan to revitalize the economy, which, under Obama, has averaged less than 2% growth.  Trump is projecting a rate of growth of 4%, which would create a boom.  His plan is to reduce marginal tax rates on individuals and businesses, renegotiate trade deals, and reduce regulations on businesses.  He also proposed to allow companies that have funds overseas to bring the money back into the USA, to use in the USA, by paying a lower tax rate.

The plan is similar to Ronald Reagan's, which lowered marginal tax rates and reduced regulations which in turn led to a boom.

The basis of the Reagan and Trump plan is to reduce tax rates to allow individuals and businesses to use the money as they see fit instead of having the government spend the money.  Even though the tax rates are lowered, tax revenues increase, as they did under Reagan, because of the increase in economic activity.  Democrats always object and mock this as trickle-down economics because they prefer to have the government spend the money instead of individuals and businesses.

While reducing tax rates is important, it is almost as important to reduce the regulations that federal agencies issue daily.  Businesses have to comply with these regulations.  It takes man-hours in H.R. departments, legal fees, and administrative costs, all of which take away from the essentials of the business such as production, manufacturing, and distribution.

Lydia Wheeler, of the Hill, reported on December 30, 2015:

2015 was a record-setting year for the Federal Register, according to numbers the Competitive Enterprise Institute in Washington, D.C., released Wednesday.  This year's daily publication of the federal government's rules, proposed rules and notices amounted to 81,611 pages as of Wednesday, higher than last year's 77,687 pages and higher than the all-time high of 81,405 pages in 2010 – with one day to go in 2015.

The regulations are printed in the Federal Register, also known as the Coder of Federal Regulations (CFR).

An example of the agency regulations is the IRS rule requiring that employers provide health insurance that has birth control and abortion coverage.  The IRS has hounded the Little Sisters of the Poor on this issue.  So in addition to caring for elderly patients in their homes, the Little Sisters have to spend resources to  fight  the IRS.

This highlights a major problem with agency regulations: the lack of accountability by the agencies.

 Article 1, Section 1 of the Constitution states:

All legislative Powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and a House of Representatives.

While this is clear, Congress has passed numerous laws and approved such agencies as the EPA, NLRA, Internal Revenue Code, OSHA, Social Security, and Obamacare.  Congress gives these agencies the power to issue regulations to administer, interpret, and enforce the laws.  For example, the IRS issues numerous regulations on the meaning of income, credits, and deductions.  The agencies have also been busy with Obamacare to issue regulations such as those forcing the Little Sisters of the Poor to offer abortion coverage as part of the medical insurance.

This branch of the law is called administrative law, which means the regulations issued by the agencies.

This gives the president enormous power, because the president appoints the Cabinet and the heads of the agencies.  But it also removes a check on the actions of the agencies by the voters.

We elect Congress to pass the laws and can vote against congressmen, but we have no vote against the agencies.  An agency's regulations can be rejected by a majority vote of Congress, but this rarely happens. 

An agency regulation may also be challenged in federal court by an aggrieved party.  But the judicial standard to overturn a regulation favors the agency.  The standard was stated in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984), where  the U.S. Supreme Court stated  a two-step test for whether a court should defer to an administrative agency's statutory interpretation: (1) Did Congress directly address the precise question at issue?  And (2) if not, is the administrative agency's answer based on a reasonable construction of the statute?

This puts the burden of proof on the person challenging the regulation, and most regulations are upheld by the courts.  But most regulations are not challenged, because it is expensive to litigate.

Thus, Congress has given away to agencies much of its power to legislate.  Congress passes a broadly worded statute and tells the agency to fill in the blanks.

As part of reducing the issuance of regulations, President Trump and a Republican Congress should pass a law that shifts the burden of proof to the agencies, to prove that their regulations are reasonable.  They should allow mandatory attorney fees to anyone who challenges the regulation and wins.

But more importantly, they should limit the scope of what an agency can rule, and Congress should approve of every regulation issued by an agency.  This will involve Congress in the rulemaking activity of the agencies and restore to Congress its constitutional duties and authority. 

It is time for Congress and the president to take responsibility for the regulations issued by the agencies.

If you experience technical problems, please write to