Steve Forbes is no stranger to tax policy. The chairman and editor-in-chief of Forbes magazine famously made his flat tax proposal the centerpiece of two failed runs for the Republican presidential nomination in 1996 and 2000.
In San Diego this week for a conference put on by Ashford University’s Forbes School of Business & Technology, Forbes still believes a flat tax is a good idea — though it’s not on the table as Congress continues to debate overhauling the tax code.
Even so, Forbes continues to have strong opinions regarding the tax policy and what Congress should do to lower taxes.
“They should do across-the-board rate cuts like John Kennedy did, like Reagan did,” he said this week in an interview in La Jolla. “Just do a big fat rate cut and come back for reform later.”
Forbes, 70, came to town for a conference put on by Ashford University, a San Diego-based for-profit online educational institution.
About five years ago, Ashford University’s parent, Bridgepoint Education, agreed to pay Forbes Media $45 million over 12 years for the rights to rename Ashford University’s business college the Forbes School of Business & Technology. Students get access to Forbes magazine archives, as well as webinars, lectures and guest teachers from its stable of 1,200 online and print contributors.
This week’s summit was part of a larger initiative of the Forbes School of Business to work directly with industries to adapt its educational offerings to serve students and employers.
“As we face a widening skills gap in this country, universities need to evolve to provide programs and training that will support business growth and success,” says Bob Daugherty, executive dean of the business college. “Degrees are just part of the solution. We want to find what is around the corner to ensure our students are successful in business.”
Forbes called his company’s work with Ashford University to date a “discovery process” for both sides.
“We are about information,” he said. “We convey it in paper and online. Why not also do it with tools to help you get ahead.”
Business owners and managers are being bombarded with new technology and other information, said Forbes.
“They are being hit with artificial intelligence, the cloud, big data analytics, what does this all mean?” he said. “We can help them focus on what do you need to know in technology, what do you need to know in finance, leadership and the like. That’s where we think we can fill a gap.”
During his runs for the Republican nomination, Forbes advocated for a 17 percent federal flat tax, with exemptions on the first $52,800 earned by a family of four would be tax free.
“Forty countries and jurisdictions around the world have it now, and it has worked very well,” he said. “This is not theoretical stuff in a classroom. This is real world experience.”
In the latest attempt at tax reform, Republicans in Congress are “talking a good game on the business side, so maybe they will get something useful there,” said Forbes. “On the individual side they’re talking about how they’re going to double the exemptions. They shouldn’t say double the exemptions. They should say for a couple, your first $25,000 will be free of federal income tax. People understand that.”
Forbes said reforms should be tailored so everyone, including people who don’t earn enough to pay federal income taxes, sees a benefit from overhauling the tax code — with lower income Americans perhaps getting a reduction in social security tax rates for a period of time.
“Everyone gets a tax cut. Everyone sees a higher pay check. And with the rates lower, you’re going to see more investment, which means you can get better jobs in the future,” he said.
An advocate of deregulation and supply-side economics, Forbes contends that poor monetary and labor policy over the past several years have contributed to “European-like growth rates, when normally we would easily outpace Europe.”
While the unemployment rate is low, it’s partly because millions of Americans — especially prime working age men — have dropped out of the labor force.
“When you get the economy moving again and remove these artificial barriers, you start to see the labor force participation rate move up,” he said. “Growth is the only way.”
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