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British Prime Minister Liz Truss attends a news conference in London, Oct. 14.
Photo:
POOL/REUTERS
Ensuring economic vitality is a basic responsibility of any government leader.
Liz Truss,
the U.K.’s new prime minister, was on the right track with a budget proposal rooted in restrained spending and tax cuts—two essential elements for economic growth. But she went wobbly in the face of opposition both from the Labour Party and within her own Tories. Chancellor
Jeremy Hunt,
whom she presumably picked to stabilize her flailing premiership, announced Monday that he would reverse nearly all of the plan’s £45 billion in tax cuts. Ms. Truss’s government has already walked back proposals to cut taxes on high earners and corporations.
That her plan found such opposition is no surprise. Pro-growth economic proposals are inevitably met with strong partisan resistance. There’s never a shortage of skeptics who scream “That won’t work!” while playing up the scenarios in which people could suffer. It happened to me, both in Congress and as governor of Ohio.
During my six years as chairman of the House Budget Committee, we reformed welfare, privatized government programs and, in 1997, balanced the federal budget for the first time in a generation. We did it by restraining spending, bringing down capital-gains taxes and controlling costs. The result was a new wave of economic renewal.
When I took office as Ohio governor in 2011, I inherited a state in economic free fall. Our job creation and retention numbers were dismal. Industries were packing up and leaving. My team and I got the state’s fiscal house in order with a conservative approach to managing taxpayers’ money and a tight rein on government spending.
Cutting taxes was critical to improving Ohio’s business climate. Our tax cuts added up to roughly $5 billion, and under my leadership the private sector created nearly 500,000 jobs.
A key to our success was ratcheting down Ohio’s income tax, the second most harmful levy in our state behind the death tax, which we totally eliminated. Reducing state income taxes allows people to keep and spend more of their hard-earned money. It creates incentives to work and frees up more capital to invest in jobs growth. We also reduced the tax burden on small businesses to add momentum to our economic recovery and make Ohio a more attractive destination for small-business startups.
I am firmly convinced that tax reform is the right approach for leaders who want to drive economic growth and strengthen their economies. I’ve seen it work. My advice for Ms. Truss and other leaders: Hold true to your principles, pick a sound plan that you believe in and carry it through. And most of all, don’t cave in to those who scream and yell the loudest. Those you serve will be better off for it.
Mr. Kasich, a Republican, served as chairman of the House Budget Committee (1995-2001) and governor of Ohio (2011-19).
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Appeared in the October 18, 2022, print edition.
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