New column: Arthur Laffer on the strengths and limits of his famous curve
My new column is in the issue of Time with an empty-pocketed Mahmoud Ahmadinejad on the cover and online here. It begins:
If there's one thing that Republican politicians agree on, it's that slashing taxes brings the government more money. "You cut taxes, and the tax revenues increase," President Bush said in a speech last year. Keeping taxes low, Vice President Dick Cheney explained in a recent interview, "does produce more revenue for the Federal Government." Presidential candidate John McCain declared in March that "tax cuts ... as we all know, increase revenues." His rival Rudy Giuliani couldn't agree more. "I know that reducing taxes produces more revenues," he intones in a new TV ad.
If there's one thing that economists agree on, it's that these claims are false. We're not talking just ivory-tower lefties. Virtually every economics Ph.D. who has worked in a prominent role in the Bush Administration acknowledges that the tax cuts enacted during the past six years have not paid for themselves--and were never intended to. Harvard professor Greg Mankiw, chairman of Bush's Council of Economic Advisers from 2003 to 2005, even devotes a section of his best-selling economics textbook to debunking the claim that tax cuts increase revenues.
The yawning chasm between Republican rhetoric on taxes and even informed conservative opinion is maddening to those of wonkish bent. Pointing it out has become an opinion-column staple. But none of these screeds seem to have altered the political debate. So rather than write yet another, I decided to find out what Arthur Laffer thought. Read more.
For those who might want evidence of the claim that "Virtually every economics Ph.D. who has worked in a prominent role in the Bush Administration acknowledges that the tax cuts enacted during the past six years have not paid for themselves," there's an excellent roundup here.
I'll post my Q&A with Laffer later today.
-
1
Shameless Commie Propaganda (I simply refuse to believe that you are that stupid)
1. Mr. Laffer did state the evident and nothing else: (1) if government will collect 100% nobody will show up for work, (2) if government won't collect nothing it will have no revenues and (3) there is a maximum somewhere in between.
2. So "diminishing returns" is far from being the biggest danger of raising taxes, the biggest dangers is sliding into area of negative impact on Laffer's curve.
3. Tax cuts did paid for themselves: e.g. in 1984 federal revenue were greater than in 1982 and grew up until 2001 and again after tax cut of 2003, revenues in 2004 were greater than in 2002 and are growing ever since
-
2
First let me say I'm impressed with all the wealth of facts and figures. However, at the end of the day I believe that the question should be what is the function of the government? I'm sure that is up for debate. Maybe I'm idealist however; I still like the whole concept of for the people by the people. In short the government should work for us. No where have I seen place that talks about how government should maximize revenue. Or at what percent can the government tax the citizens before citizen will stop working or revolt. If that has been a debate within our government I'm glad I missed it. I don't think allowing people to keep more of what they earn is a bad idea. I do believe unlimited wants and limited means applies to the government as well as citizen. Limits on spending must be set.
Corey, you are suggesting that the 1950 model is good idea? I would assume that this was abnormal conditions. Also, just because that was the tax rate did not mean the government collected it. I'm sure people had a work around. Really 90% is just encouraging fraud.
I would suggest we all look at old data with a bit of skepticism.
- TIME The road to World Cup glory | http://su.pr/4BIr6L - 11 hours ago
- TIME Twitter App Showdown: Echofon Pro vs Tweetie 2. There can be only one. (via @techland) | http://su.pr/2NRR4C - 14 hours ago
- TIME The National Zoo's panda is leaving. See pictures here | http://su.pr/1wUNuY - 15 hours ago
Most Popular »
- Tennessee Mayor Accuses Barack Obama Of Hating On Charlie Brown, Peanuts
- Wii Fit Plus Review
- Obama Shifts Date of Copenhagen Visit
- NV Sen Poll: Reid In Trouble
- The PlayStation Turns 15, We Reminisce
- 'Forgotten Man' II: Two-Thirds of Jobless Blue-Collar
- 135 Money-Saving Resources and Tips, Special Holiday Season Edition
- Twitter App Showdown: Echofon Pro vs Tweetie 2
- False Economy: Think You're Saving Money? Think Again
- Loving The Joke
- How Strong Is the Evidence Against Amanda Knox?
- Will Federal Spending Mistrust Mean the End of Obama's Audacity
- Hate Your Job? Here's How to Reshape It
- Amanda Knox, Convicted of Murder in Italy
- India, Pakistan and the Battle for Afghanistan
- Nicolas Sarkozy: A French Paradox
- Amanda Knox Testifies: The Murder Trial That Has Gripped Italy
- Helicopter Parents: The Backlash Against Overparenting
- Astronomers Spot Planet-Like Object GJ 758 B in Orbit
- Foxy Knoxy Case Still Roils Italy
Quotes of the Day »
RSS