Steve Forbes appeared on The WILS Morning Wake-Up with Dave Akerly radio show in Michigan:
☕ John Catsimatidis talked with Arthur Laffer this morning on his radio show, The Cats Roundtable.
☕ John Catsimatidis also spoke with Grover Norquist of Americans For Tax Reform.
☕ John Tamny has a new article up this morning as well.
☕ Reason, as might be expected, takes an unorthodox view of the new tax reform proposal from the Trump Administration. However, along the way there are some interesting facts and figures.
A growing economy will undercut the appeal of his ethno-nationalist politics.
Cato’s Edward’s notes that the U.S. corporate tax rates are in the “strong Laffer zone.” (The Laffer curve, named after Arthur Laffer, the economist who formulated it, shows that up to a point, tax cuts lead to an increase in revenues by fueling business expansion, broadening the tax base and attracting more foreign investments.) Studies examining OECD countries have shown that corporate tax rates above 26 percent reduce government revenues. The U.S. corporate tax rate is 14 percentage points above that rate, which is why America has a lot of room to cut. Indeed, corporate revenues from Canada’s 15 percent central corporate tax rate right now constitute 2.1 percent of the GDP (which is a bit higher than what it was when those rates were twice as high in the 1980s) and America’s 35 percent rate 1.7 percent of the GDP, estimates Edwards.
But Laffer refuses to ascribe his theory to one party, recounting a conversation with his neighbor Al Gore a few weeks ago in which the former Democratic presidential nominee told him the best bill he voted for in economics was the 1986 tax cuts.
Laffer underscored other notable Democrats, including Joe Biden, Harry Reid and Barbara Boxer, who also added their names to the 97-3 roll call, claiming they did it because it was “the right thing to do.”
Laffer joined The Heritage Foundation’s tax expert Steve Moore Monday to resell the pertinence of his Reagan-era tax cuts during a Heritage panel discussing the need for tax reform.
“We are at a stage in our history where we need a low-rate, broad-based, flat tax,” Laffer said, repeating the mantra throughout his talk.
He began with a cost-benefit analysis, pointing to John F. Kennedy’s tax cuts in the 1960s, where the highest marginal income taxes were dropped from 91 to 70 percent and the lowest from 20 to 14 percent.
Under these cuts, those in the highest tax bracket could now keep 30 cents of every dollar they made versus the 9 cents they were able to keep prior to the tax cuts. Similarly, those in the lowest tax bracket could now keep 86 cents of every dollar versus the previous 80 cents.
This cut, Laffer continued, reaped the greatest cost-benefit ratio for those in the highest tax bracket, giving them a steeper incentive to work because they were able to keep more of what they worked for.
“The reason you cut tax rates on highest group is not because you love rich people … it’s because you get more bang for the buck,” he said.
The Pittsburgh Tribune-Review has a preview of some books coming out in 2015. Among them, they mention a book by Arthur Laffer and Stephen Moore. The book, unfortunately, doesn’t come out until late July, but you can pre-order it today.
In “Blue Exodus: Why Americans Are Moving to Red States” (Encounter Books, July 28), Arthur Laffer, supply-side economics icon and “Laffer curve” namesake, and Stephen Moore, The Heritage Foundation’s chief economist, analyze an American division driven by both politics and personal bottom lines. They tackle what’s increasingly driving individuals and businesses to vote with their feet for lower taxes and debt, fewer regulations, energy development and right-to-work laws by relocating from liberal “blue” states to conservative “red” states.