 Overview The Trump administration, supported by a Republican-led Congress, has a pivotal chance to reverse the damage inflicted by the Biden administration's misguided antitrust policies. This report outlines the path to unleashing America’s tech potential through innovation, competition, and free-market principles. Key Points
Conclusion The report highlights a roadmap for the Trump administration and Congress to promote free-market policies, secure America’s technological leadership, and prioritize innovation and economic growth. Confirming regulatory leaders who support these principles is vital to achieving these goals.
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Today, we mark the inauguration of Donald J. Trump as President of the United States. As he takes office, many are eager to see significant policy shifts to boost the economy, create jobs, and empower American businesses. The first 100 days will be crucial in shaping the path to prosperity through executive actions, strong leadership, and strategic pressure on Congress. This period could see bold moves to cut government spending, unleash energy potential, and create opportunities for workers and businesses.
Thanks for joining me in this episode of "This Week's Economy." For more insights, visit vanceginn.com and get even greater value with a paid subscription to my Substack newsletter at vanceginn.substack.com.  Originally posted at EconLib.
The federal government’s $36 trillion debt isn’t just a fiscal issue—it’s a direct threat to economic freedom and prosperity. Every dollar borrowed is taken from us and future generations, limiting opportunities for growth and innovation. But there are more poor policies at the federal, state, and local levels stifling opportunity, which should be addressed in 2025. My economic foundation, rooted in the works of Milton Friedman, Friedrich Hayek, Thomas Sowell, James Buchanan, Douglass North, and others, demonstrates a clear path forward: reduce spending, limit government overreach, and empower individuals over bureaucracies. Milton Friedman taught that economic freedom is fundamental to prosperity, emphasizing lower taxes, restrained spending, and free-market solutions. Friedrich Hayek warned against centralized planning, which replaces individual decision-making with bureaucratic mandates. Thomas Sowell highlighted how market-based solutions like school choice can address systemic failures. James Buchanan noted how politicians and rent-seekers are rational but misguided and distort market activity. Douglass North explained the importance of institutions for people to prosper. These lessons remind us that when the government grows, freedom shrinks. We should remember this again; policymakers at every level should abide by these lessons. Cut Spending, Restore Freedom Excessive government spending fuels debt and inflation, harming individuals and businesses. Programs grow unchecked, often delivering diminishing returns. James Buchanan’s public choice theory explains this dynamic: politicians prioritize short-term gains over long-term solutions, leading to bloated budgets and waste. Fiscal discipline is the necessary path forward. Colorado offers a proven model. Its Taxpayer’s Bill of Rights (TABOR) limits government spending growth to population increases plus inflation and requires voter approval for tax hikes. TABOR has kept spending in check even as the state turned blue, refunded surpluses to taxpayers, and strengthened the state’s economy. Applying the TABOR’s principled approach–while strengthening it to cover all spending and using surpluses to reduce tax rates rather than send refunds–at federal, state, and local levels would rein in spending and give power back to taxpayers. Spending restraint must also target “entitlement” programs or sacred budget cows like Social Security, Medicare, Medicaid, defense, education, and transportation. Transitioning to personal accounts, implementing means-testing, raising age limits, and eliminating costly programs can ensure resources for the most vulnerable while reducing taxpayer burdens. Cutting unnecessary programs and laws like the Export-Import Bank, Jones Act, and many occupational licenses would further reduce waste and cronyism. Simplify Taxes, Let People Prosper Friedman’s vision of lower, flatter taxes is critical to restoring economic freedom. A simpler tax code eliminates distortions, encourages investment, and allows individuals to keep more of what they earn. High taxes discourage productivity and innovation, disproportionately hurting small businesses and entrepreneurs. A lower, flatter tax system would ensure fairness and efficiency. By reducing corporate and individual tax rates to zero and eliminating special-interest loopholes, we can promote growth and reduce the economic drag caused by the current tax system. Education Savings Accounts: Funding Students, Not Systems Education is a prime example of government inefficiency. Billions of dollars are spent annually on “public” schools, yet outcomes remain stagnant, leaving students and taxpayers shortchanged. Education Savings Accounts (ESAs) offer a transformative solution. With ESAs, education funding follows students, not systems. Families can use these funds for tuition, tutoring, or other educational needs. States like Arizona and Florida have implemented universal ESA programs, improving outcomes while reducing costs. Expanding ESAs should be done at the state level while getting the federal government out of schooling to empower parents, promote competition, and drive innovation in education. Thomas Sowell’s insights on choice and accountability reinforce this approach. By introducing market forces into education, we can break free from the bureaucratic systems that have failed students for decades. Deregulation: Unleashing Innovation Overregulation stifles economic growth and innovation, particularly in emerging fields like artificial intelligence. Friedrich Hayek’s warnings against centralized control are particularly relevant here. Heavy-handed government rules slow progress and reduce competition, while deregulation allows markets to flourish. Regulatory sandboxes provide a solution. These controlled environments let innovators develop and test technologies without burdensome restrictions. By fostering a culture of innovation, we empower entrepreneurs to solve challenges in healthcare, education, and beyond—where bureaucracies have repeatedly failed. However, these regulatory sandboxes are helpful only if they contribute to unleashing or keeping away harmful regulations. If they pick winners and losers, this is another barrier. Artificial intelligence and emerging technologies can potentially transform industries and improve lives. To fully realize their potential, the government must take a light-touch approach, prioritizing transparency and accountability without stifling creativity. The Path Forward To tackle overspending by politicians and overfunding by taxpayers to support more prosperity, bold reforms are necessary:
Freedom to Prosper Excessive debt and government overreach are not inevitable—they result from policy choices. Choosing freedom means reducing spending, cutting taxes, and unleashing innovation. It means trusting individuals, not bureaucracies, to make the best decisions for themselves and their families. As Friedman observed, “The government solution to a problem is usually as bad as the problem.” By adopting policies prioritizing fiscal discipline, deregulation, and individual empowerment, we can reclaim economic freedom and build a society where people thrive. The path forward in 2025 is clear: let’s commit to policies that limit government, reduce spending, and ensure every individual has the opportunity to prosper.  Originally posted at Texans for Fiscal Responsibility. The latest Biennial Property Tax Report from the Texas Comptroller confirms what many Texas homeowners and fiscal watchdogs, like TFR, already suspected: property taxes did, in fact, increase in 2023 by $650 Million despite promises of relief. While this news is frustrating, it also sets the stage for extraordinary opportunities to deliver meaningful reform for taxpayers in the upcoming 2025 Legislative Session.  The Legislature allocated nearly $13 billion over two years to reduce school district maintenance and operations (M&O) property taxes. However, these efforts fell short due to excessive local government spending and levy limit loopholes. Yet, with an expected $20 billion state surplus—the result of over-collected taxpayer dollars—the 2025 session presents a chance to rethink Texas’s property tax system entirely and deliver lasting relief. 2023 Data Highlight What Went Wrong  The Legislature’s intent to cut school district property taxes by more than $6 billion in 2023 was undermined by decisions at the local level:
A System Built to Grow Government The current property tax system prioritizes government growth over taxpayer relief. Over the past 25 years, total property tax levies in Texas have grown by an average of 5.63% annually, far outpacing inflation and population growth. Local governments have consistently used loopholes in property tax levy limits to raise revenues and fund new spending projects without voter approval. Additionally, rising local debt burdens taxpayers further. Property tax revenue is increasingly used to pay for debt service rather than essential services, compounding the strain on homeowners. Even the $13 billion allocated by the Legislature for property tax relief in 2023 was insufficient to counteract these spending trends. Frustration with the Legislature The Legislature’s efforts in 2023 didn’t go far enough. While they allocated billions for relief, loopholes in levy limits and excessive state and local spending negated much of the benefit. Texans deserve better. However, frustration can turn into optimism. The 2025 Legislative Session, beginning on January 14, offers a historic opportunity to fix what’s broken. With a roughly $20 billion surplus, lawmakers have the resources to make bold changes that could transform the property tax system for good. The Opportunity in 2025 This extraordinary surplus allows the Legislature to address the systemic issues driving property tax increases. Here’s how the Legislature can deliver meaningful reform:
While the 2023 results are disappointing, the upcoming session presents an opportunity for bold action. Texans deserve lower property tax bills, not a system that fuels government growth at their expense. The Legislature must recognize that excessive spending is the core problem and take decisive steps to address it. The good news is that Texans are paying attention. The public demands real solutions, and lawmakers have the resources to deliver. By focusing on spending restraint, closing loopholes, and using surplus funds for tax relief, the Legislature can make 2025 the year Texans finally see meaningful, lasting property tax cuts on a path to elimination. The Path Forward This isn’t just about cutting taxes—it’s about empowering Texans to own their property and reducing the government’s burden on their lives. By taking bold steps in 2025, the Legislature can ensure that homeowners no longer feel like they’re renting their homes from the government. I’ve spent over a decade advocating for property tax reform and fiscal responsibility, and I remain optimistic about what can be achieved in 2025. Let’s turn frustration into action and maximize this extraordinary opportunity to let people prosper! What happens when faith meets economics? In this episode of the Let People Prosper Show, Bill Peacock, a seasoned public policy expert, brings over 30 years of experience to the table. He shares how his Christian worldview shapes his approach to property rights, energy policy, and the Texas budget.
Bill dives into critical issues like the complexities of Texas property taxes, the challenges of conservative budgeting, and the future of energy policy in a state vital to the U.S. economy. This episode unpacks the foundational principles of freedom, accountability, and prosperity, making it a must-watch for anyone passionate about sound governance and free markets. As President Biden’s term ends, we see a flurry of last-minute legislation. Meanwhile, President-elect Trump is gearing up for his inauguration next week, setting the stage for a new chapter in national politics. The policy landscape is heating up at the state level as legislative sessions get underway. In Texas, the 89th Legislative Session kicks off tomorrow, and I’ll be closely monitoring key bills.
In this week's episode, I discuss these topics and more. You can watch it on YouTube below, listen to it on Apple Podcast or Spotify, or visit my website vanceginn.com for more information. What if everything you thought you knew about tariffs and taxes was wrong? In this episode of the Let People Prosper Show, Erica York, senior economist and research director at the Tax Foundation, unpacks the truth behind tariffs, the future of the Tax Cuts and Jobs Act, and why states compete to lead on tax reform.
If you want to understand how these policies impact your wallet and why states like Texas and Kansas are shaking things up with bold reforms, this episode is for you. Erica’s insights go beyond the headlines, offering a clear picture of what’s driving economic change—and what it means for your future. See show notes at vanceginn.substack.com. (0:00): Intro: The real impact of tariffs and tax policies (3:20): Why tariffs hurt Americans more than they help (8:45): The smarter alternative to tariffs: Free trade agreements (12:10): How the Tax Cuts and Jobs Act changed the economy (18:30): What happens when the tax cuts expire? (22:45): State-level tax reform: Flat taxes and property tax reductions (29:00): Why competition among states matters for growth (36:05): Practical reforms that create long-term prosperity (40:50): Final thoughts: How policy drives opportunity  Originally posted at Pelican Institute.
Louisiana ranks 23rd among U.S. states in the Fraser Institute’s latest2024 Economic Freedom of North America (EFNA) report, reflecting persistent challenges with high taxes, excessive government spending, and restrictive labor market policies. However, recent reforms give hope for a brighter future. With targeted action, Louisiana can rise in the rankings and create a more competitive, dynamic economy for Louisianans. Taxation: Progress on the HorizonLouisiana’s tax system has long been a barrier to economic freedom. High income and corporate tax rates have discouraged business investment and job creation, contributing to the state’s middling EFNA ranking. However,recent tax reforms are changing the narrative. Last month, the state introduced a flat 3% individual income tax rate—down from a progressive tax structure—and a flat corporate income tax rate of 5.5%, eliminating the corporate franchise tax. These proposed changes, which voters will approve in March 2025, simplify the tax structure and aim to attract businesses and high-income earners. While these reforms will take time to influence the EFNA rankings, they signal a significant step toward improved tax competitiveness and economic freedom. Government Spending: A Gator-Sized Problem Louisiana struggles with high per capita government spending, which weighs heavily on taxpayers and relies heavily on federal aid. Inefficiencies and wasteful expenditures drain resources that could fund critical infrastructure or expand educational options for families. Adopting stricter fiscal discipline is essential. Louisiana lawmakers recently took steps to curb the growth of recurring spending using the state’s general fund, but more will be needed. Like Colorado’s model, a population-plus-inflation expenditure limit would curb overall spending growth and stabilize the state’s finances. Additionally, priority-based budgeting would ensure funds are allocated efficiently, cutting waste and maximizing impact. Rising state and local debt and dependency on the state purse strings will continue to threaten fiscal stability without these measures. Labor Market Regulations: Unlocking Potential Ranked 34th in labor market freedom, Louisiana’s restrictive occupational licensing laws limit workforce mobility and discourage entrepreneurship. Licensing requirements often serve as unnecessary barriers to entry, making it harder for low-income residents to access higher-paying opportunities. Streamlining licensing requirements would help Louisiana attract skilled professionals and improve economic mobility. Louisiana has taken bold steps to enact universal licensing recognition and to strengthen licensure regulation ties to health, safety, welfare, and fiduciary objectives, but numerous requirements not tied to these objectives remain in the state’s statutes. Removing these overly restrictive barriers is essential for creating a flexible labor market and encouraging innovation and job growth. How Louisiana Stacks Up Louisiana lags behind regional leaders in economic freedom:
A Roadmap to Improvement To climb the rankings and foster prosperity, Louisiana must focus on three key reforms:
Conclusion Louisiana can increase economic freedom but must remain committed to meaningful reforms. Recent tax policy changes are an encouraging start, but addressing government spending and labor market regulations will be critical to future success. By focusing on these priorities, Louisiana can become a beacon of opportunity in the South. Economic freedom is the foundation of prosperity, and Louisiana is ready to show its residents—and the nation—what’s possible with the right policies. 2025 brings new opportunities and challenges with President Trump’s return to office, a reshaped Congress, and bold initiatives from state legislatures. While President Trump’s leadership style often introduces volatility, the focus must remain on fostering economic freedom and prosperity through reduced government spending, lower taxes, and targeted deregulation. In this episode of the Let People Prosper Show, I’ll outline the top reforms we need at both federal and state levels—from universal school choice to eliminating property taxes—to ensure progress, even in the face of political uncertainty. Watch the episode on YouTube below, listen to it on Apple Podcast or Spotify, and visit my website for more information.
 Originally posted at Kansas Policy Institute.
New economic data paint a sobering picture for Kansas’s economy. In Q3 2024, Kansas’s real gross domestic product (GDP) grew by just 1.4%, ranking 45th nationally. Neighboring states like Oklahoma (3.5%, Rank 19) and Colorado (3.4%, 20) significantly outperformed Kansas, reflecting stronger growth strategies, while Nebraska (-1.4%, 49) declined. These numbers demand bold reforms rooted in free-market principles to pull Kansas out of stagnation and create an economic environment where businesses and families can thrive. What’s Holding Kansas Back? Kansas’s GDP growth was driven by modest gains in retail trade and healthcare, but these weren’t enough to offset weaknesses in manufacturing and agriculture. Manufacturing, once a driver of Kansas’s prosperity, now struggles under the weight of regulatory barriers and rising costs. Agriculture, a cornerstone of the state’s economy, faces price volatility and global competition that magnify its cyclical nature. Meanwhile, Kansas’s neighbors, particularly Oklahoma and Nebraska, have leveraged industries like energy and advanced manufacturing to accelerate growth. Oklahoma’s thriving energy sector and Nebraska’s focus on diversified manufacturing demonstrate what’s possible when states adopt pro-growth policies and focus on competitive advantages. Labor Market Woes Kansas’s struggles extend to its labor market. The unemployment rate climbed to 3.5% in November 2024, up from 2.6% a year earlier. Job growth is concentrated in low-wage industries like retail and hospitality, with limited expansion in high-wage sectors such as technology and advanced manufacturing. This imbalance stifles income mobility and leaves families with fewer opportunities to prosper. In contrast, Oklahoma and Nebraska maintain lower unemployment rates of 3.3% and 2.8%, reflecting more robust labor markets driven by business-friendly policies. Kansas’s inability to create high-paying jobs underscores the need for reforms that reduce barriers to business growth and foster workforce development. The Hidden Tax of Regulation Excessive regulations are among the most significant barriers to Kansas’s economic growth, acting as a hidden tax that increases costs for businesses and consumers alike. According to the Mercatus Center, Kansas has over 72,000 individual regulatory restrictions across various industries. This places Kansas ahead of Nebraska but behind Missouri and Oklahoma, which have fewer restrictive rules. These restrictions stifle entrepreneurship, limit innovation, and discourage investment, all of which are crucial for a thriving economy. Kansas ranks 14th nationally in economic freedom, according to the Fraser Institute, but this position hides deeper challenges. Economic freedom is driven by limited government intervention, but Kansas’s high regulatory burden and tax structure erode its competitiveness. For example, the construction sector in Kansas faces over 7,500 specific regulatory requirements, inflating costs and delaying projects. Similarly, agriculture bears the burden of over 5,000 restrictions, making it harder for farmers to adapt to market changes or implement innovative practices. Neighboring states like Oklahoma have streamlined regulations, leading to stronger GDP growth and job creation. Sunset reviews of existing regulations in Kansas could ensure outdated policies no longer weigh on economic activity. Reducing occupational licensing requirements—among the most restrictive in the region—would also lower barriers to entry for workers and entrepreneurs, fostering greater innovation and job creation. Free-Market Solutions for Growth To unleash its economic potential, Kansas must adopt free-market reforms that remove barriers to growth and empower individuals and businesses. Reducing the costs associated with Kansas’s 72,000 regulatory restrictions through targeted reviews and eliminations would open the door for businesses to expand and innovate. For instance, removing occupational licensing requirements for non-essential professions, such as certain construction or personal service roles, would immediately reduce costs and promote entrepreneurship. Spending less and improving tax competitiveness are equally crucial. High income tax rates discourage investment and reduce disposable income for families. Lowering these rates, or even eliminating them as in one of eight states without income taxes, would attract businesses and residents alike, spurring economic growth. Reducing government spending and simplifying the tax code would also reduce compliance costs and enhance transparency. Workforce development driven by private-sector initiatives is essential. Employer-led training programs and private scholarships in high-demand fields like technology and logistics can better align skills with market needs. These free-market solutions empower businesses to invest in their workforce without the inefficiencies of government-driven programs. Diversifying Kansas’s economy by reducing reliance on agriculture and traditional manufacturing will also play a key role. By removing government obstacles, industries like nuclear energy, biotech, and logistics, can attract innovative businesses and create a more dynamic economic landscape. A Brighter Future for Kansas Kansas’s weak GDP growth and rising unemployment reveal the urgent need for reform. Neighboring states are outpacing Kansas by embracing more free-market principles that reduce government interference and empower the private sector. Reducing regulations, increasing economic freedom, spending less and lowering taxes will reinvigorate the state’s economy and ensure a brighter future for its residents. With bold, market-driven reforms, Kansas’s economic potential can finally be realized.  Originally posted at Texans for Fiscal Responsibility.
Texas continues to lead as an economic powerhouse in the United States, but challenges persist. With the 2025 legislative session around the corner, it’s imperative that lawmakers address rising government spending, high property taxes, and regulatory barriers to ensure sustainable growth. The following analysis highlights where Texas stands today and what must be done to keep the Lone Star State competitive. The State of the Texas Economy Texas stands as a national leader in economic performance, with its real gross domestic product (GDP) growing by 4.2% in Q3 2024, ranking 9th nationally. This robust growth outpaced the national average of 3.1% and underscores the state’s resilience and business-friendly policies. However, with Florida growing at 3.3% (21st) and California at 3.1% (23rd), Texas leads but can’t sit on its laurels. Personal income growth in Texas remains strong, increasing by 4.0% in Q3 2024. This outpaces Florida’s 3.3% and California’s 3.1%, further highlighting the state’s economic strength. In the labor market, Texas added 274,300 jobs year-over-year through November 2024, achieving an annual job growth rate of 2.0%, which outpaced the national rate of 1.4%. The civilian labor force reached a record 15.5 million, with a participation rate of 64.7%, the highest in a decade. Despite these gains, the state’s unemployment rate rose slightly to 4.2%, ranking 33rd nationally, behind Florida’s 3.4% (19th) but ahead of California’s 5.4% (49th). Challenges Facing Texas in 2025 Despite its strengths, Texas faces critical challenges that could hinder its long-term prosperity. The state’s budget increased by a record 32% last session. This unsustainable trajectory risks undermining the fiscal stability that has attracted businesses and residents to Texas. Without immediate reform, this spending growth could necessitate higher taxes or reduce the state’s competitiveness. Property taxes in Texas are among the highest in the nation, driven largely by the school district maintenance and operations (M&O) tax, which directly impacts homeowners and businesses. This tax discourages homeownership and investment, underscoring the need for substantial reform to provide relief and support economic growth. Texas also lags in regulatory efficiency. Overly burdensome occupational licensing requirements and delays in permitting processes stifle entrepreneurship and innovation. In contrast, Florida’s streamlined regulatory framework has created a more dynamic business environment. The state’s business franchise tax, or margins tax, continues to act as a barrier to small business growth and investment. Eliminating this tax would provide immediate economic benefits and enhance Texas’ reputation as a pro-business state. Recommendations for the 2025 Legislative Session To sustain its economic leadership position, Texas must enact bold reforms during the upcoming legislative session. Chief among these is spending less with a maximum of a zero-growth budget, which freezes spending. In addition to spending restraint, Texas must address its property tax burden by using surplus revenues above less spending to phase out the school district M&O tax. This reform would relieve homeowners and businesses of one of the state’s largest economic barriers and encourage further investment. But this should be combined with paths to eliminating all property taxes in Texas so Texans can finally own their home. Abolishing the franchise tax should also be a priority. Eliminating this tax would attract more businesses and entrepreneurs, fueling job creation and long-term growth. Streamlining regulatory processes is another essential step. Simplifying occupational licensing requirements and recognizing out-of-state licenses will lower costs for workers and businesses alike. Improving permitting efficiency will encourage faster investments in key industries. Finally, lawmakers must expand education freedom by implementing universal education savings accounts (ESAs). This policy would empower parents, improve educational outcomes, and reduce inefficiencies in the school funding system. Conclusion With a strong economy and a growing workforce, the state has the tools to lead the nation. However, bold action is needed to address runaway spending, high taxes, and regulatory burdens. By adopting a zero-growth budget, eliminating burdensome taxes, and expanding economic freedoms, Texas can secure its position as the top destination for businesses and families alike. The 2025 legislative session offers an opportunity for transformative reforms. The path forward is clear: spend less, tax less, regulate less, and let people prosper. With the right policies, Texas can continue to shine as a beacon of opportunity and growth for generations to come. The 2026 South Carolina Responsible Budget: A Blueprint for Fiscal Discipline and Economic Growth1/6/2025  Originally published at South Carolina Policy Council with Sam Aaron. See this link for all figures.
By Vance Ginn, PhD., and Sam Aaron South Carolina has enjoyed significant economic success. With strong labor market growth and a favorable climate for business investment, the state continues to be one of the fastest-growing states in the nation. However, without a responsible approach to budgeting, this progress risks being overshadowed by excessive government spending. The S.C. Policy Council created the South Carolina Responsible Budget (SCRB) project to encourage lawmakers to adopt responsible spending restraints. This report highlights why state legislators must prioritize fiscal discipline through a responsible budgeting framework that aligns spending growth with population growth and inflation. Such a policy will enable long-term prosperity and provide room for meaningful relief – specifically, the eventual elimination of personal income taxes. What is a Responsible Budget A responsible budget is a budgeting model that limits appropriations based on population growth plus inflation. This approach accounts for these two metrics while considering economies of scale, recognizing that a simple increase in population does not always require a proportional increase in spending. The SCRB does not specify how general funds should be allocated. Instead, it sets a recommended limit on the total amount that should be appropriated, ensuring that any necessary spending growth remains affordable. Last year, South Carolina accelerated the income tax cuts passed in 2022, simplifying and lowering personal income taxes (as supported by SCPC). However, if the state is serious about eliminating income taxes, it must follow a model that restrains spending. The SCRB is the perfect tool for this purpose. Current Labor Market and Economic Standing South Carolina’s labor market remains strong but faces challenges in maintaining its competitive edge. As of September 2024:
South Carolina’s real Gross Domestic Product (GDP) grew by 4.5% annually in Q2 2024, outperforming the national average of 3.0%, while personal income rose by 6.9% year-over-year, the fastest in the country. These metrics reflect a healthy economy; however, fiscal mismanagement could put this progress at risk. Excessive spending, as seen in recent budgets, jeopardizes long-term growth and diminishes the state’s ability to respond to future economic challenges. SC Appropriations vs. Responsible Budget South Carolina’s general fund appropriations have consistently exceeded sustainable limits, as shown in Figure 1. Over the last decade, the state has failed to align spending with population growth and inflation, opting for rapid budget expansion. This trend threatens the state’s fiscal foundation. Key Takeaways
Such uncontrolled spending burdens taxpayers and reduces the state’s ability to maintain a competitive tax environment. Without reform, South Carolina risks falling behind neighboring states like North Carolina, which has adopted more disciplined budgeting practices. Setting a Responsible Budget Limit South Carolina must adopt the SCRB framework for fiscal year 2026, which starts July 1 this year, to curb excessive growth. Under this model:
By adhering to this limit, South Carolina can establish a fiscal surplus that supports tax reductions, particularly the acceleration of personal income tax cuts. The South Carolina Policy Council's data-driven recommendations support this approach. The Case for Surplus Triggers South Carolina’s current revenue triggers for tax reductions rely on meeting specific revenue growth thresholds. While effective in the short term, these triggers often delay relief during economic uncertainty. Conversely, surplus triggers directly tie tax cuts to actual budget surpluses, ensuring that excess revenue is returned to taxpayers without incentivizing unnecessary government growth. States like North Carolina have successfully implemented revenue-triggered tax cuts, reducing their income tax rate to 2.49% by 2030. South Carolina should follow this direction but instead, use the surplus buydown that allocates surplus funds above a strict spending limit to:
Comparisons with Nearby States South Carolina’s tax system ranks 33rd overall in the Tax Foundation’s 2025 State Tax Competitiveness Index. While the state boasts a competitive corporate tax rate of 5%, its individual income tax system and reliance on property and sales taxes hinder its economic standing:
Recommendations for Reform To secure South Carolina’s fiscal future, legislators should adopt the following reforms:
Conclusion South Carolina’s economic growth and rising revenues present an opportunity to implement transformative fiscal policies. The state can ensure long-term prosperity while maintaining its competitive edge by adhering to a responsible budget framework and prioritizing tax relief. Legislators must decisively curb overspending and return resources to taxpayers, ensuring South Carolina remains a beacon of opportunity. Unlocking Prosperity: Stories of Freedom and Reform with Dr. Matt Mitchell | LPP Show Ep. 1291/2/2025 What if I told you that a small country like Estonia could teach the world about escaping socialism and embracing prosperity? Or is economic freedom just about making more money—it’s about creating opportunities for people to live better, freer lives? In this episode, I’m joined by Dr. Matt Mitchell, an economist passionate about promoting human freedom. He’s a Senior Fellow at the Centre for Economic Freedom. Together, we’ll tackle big questions about global success stories, the power of freedom, and how the U.S. can learn from others who are getting it right.
This conversation with Dr. Matt Mitchell dives into what makes economies thrive and why economic freedom is about so much more than financial success. From Estonia’s remarkable turnaround to states like Texas leading the way in the U.S., the evidence is clear: economic freedom works.  Originally published by Real Clear Policy with Dr. Deane Waldman.
In 1960, President Kennedy promised the U.S. would put a man on the moon within a decade. The experts scoffed, saying it was impossible based on the science, or the lack of it. Nine years later, Neil Armstrong stepped on lunar soil. Today, talking heads as well as the public believe that fixing healthcare is impossible – it can’t be done! Doctors Ginn and Waldman disagree. They ascribe to the optimists’ credo: the difficult we do today; the impossible takes a little longer. The burning platform theory says that people will refuse to get off a shaky, unstable, dangerous platform but will quickly vacate if it is on fire. Healthcare is on fire. People are likely to accept big changes today that they would have resisted years ago. Healthcare has reached its tipping point. The formation of DOGE is proof that fundamental change is possible. Our New Year resolution for 2025 is to cure our impossible-to-fix healthcare system. The cure should produce a system that will allow Americans to obtain the care they want when they need it while simultaneously breaking the national addiction to overspending. The cure will require many, substantive changes over time. The impossible takes a little longer. The first step is to pay American workers all the money they earn. The so-called benefit of employer-supported health care is an obsolete, market-distorting holdover from wage freezes enacted during World War II that deny workers all they are owed. On average, employers are currently giving $23,968 of employees’ earnings to insurance companies instead of paying that money to employees. Step #1 in the cure is paying the $23,968 to employees, not to insurance. The natural place to park these funds would be some type of bank account for medical expenses. That is a problem. There are at least three different forms of such accounts: Health Savings Account (HSA), Flexible Spending Account (FSA), and Medical Savings Account (MSA). Each has multiple different governing regulations – federal, state, and various insurance plans. Some have use-it-or-lose-it time limits. Several insurance plans do not accept such accounts. HSAs have contribution limits such as maximums of $4150 for an individual and $8300 for a family. Thus, at least $15,668 of earnings cannot be contributed at present. Furthermore, federal regulations stipulate what are allowable medical expenses and what are not – a choice that should be made by the patient not the government. Restrictions on HSAs are a form of government control where regulations are unnecessary, inappropriate, and costly. Americans should be free to spend their hard-earned dollars as they see fit. Medical outlays should be tax-free for employees as they are now for employers. Next, it is necessary to unleash the power of an HSA but in a new, simplified and unlimited form, starting with its name. The purpose of healthcare is Care. The function of healthcare dollars is to Spend on care, not saving them. Thus, the new medical account should be called a Care Spending (not Savings) Account or CSA. There is no need for other accounts like the current HSA, MSA, or FSA. There should be no limit on how much a family can contribute to an CSA and no time limit to use these funds. The account should be passed across years and generations. CSA monies can be spent on any health-related expenditure. In addition to standard care, medications not approved by the FDA (like ivermectin for COVID), crystal therapy, aromatherapy, and other forms of alternative medicine should be allowed while a big screen TV or a new automobile should not. If a family wishes to spend their CSA money on medical expenses for a non-family member, that too should be allowed. In other words, Americans should be free to engage in tax-free spending on their medical care with no government direction, regulation, or coercion. Just because the Biden Administration labeled short-term insurance as “junk,” doesn’t mean Americans should be prohibited from purchasing it. The CSA would require no regulatory apparatus other than IRS oversight. It will eliminate the need for and spending on the BURRDEN – Bureaucracy, Unnecessary Rules and Regulations, Directives, Enforcement, and Noncompliance activities – of HSA, MSA, and FSA. This will save billions of taxpayer dollars and improve access to reliable, timely care. With more than $20,000 per year in an CSA to spend directly on care, and no third-party insurance costs or expenses for BURRDEN, providers can offer consumers drastically reduced prices for cash-only services and goods. Suddenly, that $2500 MRI would cost $750, easily affordable from the CSA. Even the $15,499 price tag for hip replacement at cash-only Oklahoma Surgery Center is not a problem. And for the rare, six-figure heart attack or cancer chemotherapy, there is high deductible catastrophic insurance (when and if Washington will stop over-regulating insurance.) The CSA shows the impossible is possible: it saves consumers’ money and simultaneously pays more to providers. A standard charge through insurance for hip replacement is $35,114; Medicaid pays $12,922. As noted previously, the cash-only, no insurance charge to the patient is $15,499, not $35,114. Payment from the CSA to the provider is $15,499, not $12,922. And, the provider is paid immediately, not after two years of aggravating insurance reviews. While many more actions are necessary to make health care accessible and affordable, the first two steps are as outlined. (1) Pay workers ALL the money they earn and let them spend it as they choose. (2) Provide a tax-free spending haven for medical expenses with a no limit (time or money) CSA. The next part (step #3) of the New Year resolution involves turning Medicaid into a functional and sustainable medical safety net, which it most certainly is not.  Originally posted at Texans for Fiscal Responsibility.
As 2024 concludes, the U.S. economy remains at a crossroads. While recent gross domestic product (GDP) revisions suggest stronger growth, the nation faces significant challenges in inflation, debt, and structural problems. Years of reckless government spending, regulatory overreach, and Federal Reserve mismanagement have left the economy vulnerable. The path forward requires bold reforms centered on fiscal discipline, sound monetary policy, and reducing regulatory burdens to foster stable, sustainable economic growth. GDP Growth: Brighter Numbers, Persistent Challenges Real GDP grew at an annualized rate of 3.1% in Q3 2024, up from 3.0% in Q2. Growth was driven by consumer spending, exports, and federal government expenditures, while private inventory investment and residential fixed investment contracted. Despite this growth, excessive federal spending continues to crowd out private-sector investment, limiting long-term economic resilience. Policymakers must enact fiscal rules, such as spending caps tied to population growth and inflation, to ensure sustainable expansion without burdening taxpayers. Labor Market: Structural Weaknesses Remain The labor market continues to struggle, with the unemployment rate at 4.2% in November, up from 3.7% a year earlier. Labor force participation remains stagnant at 62.5%, reflecting barriers such as skill mismatches and disincentives to work from overly generous welfare programs. Universal school choice and workforce-aligned education reforms are vital to prepare individuals for high-demand industries and reduce dependency on government assistance. Inflation and Monetary Policy: Rules Over Discretion Despite modest progress, the Federal Reserve’s response to inflation has been inadequate. Inflation remains above target levels, with the core PCE price index rising 2.2% in Q3 2024. Although the federal funds rate has risen to 4.25%-4.50%, years of excessive money printing and delayed tightening have prolonged price instability. The Fed’s balance sheet remains too high at $6.9 trillion, over 70% above pre-pandemic levels. This excess liquidity and fiscal recklessness continue to fuel inflationary pressures. Implementing monetary rules is crucial to maintaining purchasing power and economic predictability. Fiscal Policy: A Debt Crisis in the Making Federal debt now exceeds $36 trillion, with a debt-to-GDP ratio of over 130%. The Biden administration’s unchecked spending on “entitlement” expansions and green energy initiatives has exacerbated fiscal imbalances, threatening the nation’s economic stability. Interest payments on the debt outpace key federal priorities, underscoring the urgent need for fiscal discipline. Enacting a Responsible American Budget, which caps government spending growth to population growth plus inflation, would impose much-needed discipline on federal finances. Reducing the discretionary power of policymakers would ensure that fiscal policy remains sustainable, even during economic downturns. Regulatory Costs: A Drag on Growth Regulatory overreach continues to hinder businesses and stifle economic dynamism. The total cost of compliance with federal regulations has exceeded $2 trillion annually, acting as a hidden tax on innovation, entrepreneurship, and job creation. Policymakers must prioritize reducing regulatory burdens through comprehensive reform, including sunset provisions for outdated rules and cost-benefit analyses to ensure new regulations do not unduly harm businesses. Lowering these costs would empower the private sector to invest, hire, and grow, unlocking long-term economic potential. The Need for Fiscal and Monetary Rules Stable, sustainable economic growth requires limiting the discretion of policymakers in both fiscal and monetary arenas. Fiscal rules, such as balanced budget requirements or spending caps, reduce the temptation for politicians to overspend during periods of economic expansion. Similarly, monetary rules, such as targeting long-term price stability or a balance sheet limit, prevent the Federal Reserve from reacting impulsively to short-term political pressures. By embedding these principles into law, the economy can benefit from predictability and reduced uncertainty, fostering an environment where businesses and individuals can confidently plan for the future. Policy Solutions: A Path to Prosperity To address current challenges and secure long-term growth, policymakers must focus on:
The failures of excessive government intervention have left the U.S. economy vulnerable to inflation, debt, and stagnation. Embracing fiscal and monetary rules, reducing regulatory costs, and unleashing the power of free markets are the keys to restoring stability and fostering sustainable growth. Policymakers must act decisively, ensuring that America’s economic future is built on principles of freedom, predictability, and opportunity. |
Vance Ginn, Ph.D.
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