Today’s Brew 12-15-17

From today’s Wall Street Journal opinion pages regarding SALT and the impact that the tax reform legislation is already having in New Jersey.

WSJ 12-15-17 pA12 



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Today’s Brew 12-14-17


Today’s Brew 11-18-17


A must read.

Thomas Sowell Thoroughly Debunks Trickle-Down Economics


Today’s Brew 11-13-17

Ralph Benko has a timely piece today at Forbes.com:

Jack Kemp, Tax Reform, And The Way The World Works

According to the report of one Kemp insider, Reagan, on the verge of his presidential campaign, came to seek Kemp’s endorsement. The Reagan campaign’s purpose was to prevent Kemp from entering the race too, splitting the conservative base. Jack Kemp offered his endorsement in return for Reagan’s endorsement of the Kemp-Roth 30% across-the-board tax rate cut.

That policy was controversial among both Republicans and Democrats. It was famously attacked by Reagan’s chief rival for the 1980 presidential nomination, George H.W. Bush, as “voodoo economic policy.” Reagan, on the advice of his then-top advisors, reportedly intended to check Kemp’s box, pocket Kemp’s endorsement, and never mention the tax rate cut again.

Until, that is, President Carter attacked Reagan’s endorsement of Kemp-Roth as irresponsible. Reagan rose to its defense. Carter doubled down. So did Reagan.


And Dan Mitchell for the win!


The Cats Roundtable

Our friend, Senator Pat Toomey of Pennsylvania discussed tax reform, including SALT deducations, with John Catsimatidis on The Cats Roundtable. Listen to the discussion here (less than 10 minutes long).

Today’s Brew 10-1-17


Today’s Brew ☕ 5-25-17

Real Clear Markets

☕ John Tamny reviews a new book by Richard Salsman.

Book Review: Richard Salsman’s ‘The Political Economy of Public Debt’

Excerpt:

All of this speaks to another area of disagreement with Salsman ahead of the ones that will conclude this review.  He correctly notes that the Keynesian “demand-side model was so discredited in the 1970s” in concert with vindication for supply-side economics, which “delivered such positive financial-economic results in the 1980s and 1990s.” There’s no dispute that supply side won precisely because the latter is a tautology: when the tax, regulatory, tariff, and debased money barriers to production are shrunk, booming economic growth is the result.  Supply side makes perfect sense, but it’s arguable that supply-siders have become ridiculous to the point that their policies have become self-suffocating.  Indeed, supply siders, in their worship of the rising revenue implications of tax cuts, have forgotten that government spending is the biggest tax of all.  And in ignoring rising government spending, they’ve allowed the genius of their tax cut, deregulation, free trade, good money policy mix to be neutered.  Figure that the posthumous John F. Kennedy tax cuts were great for economic growth, and as a result, gifted Treasury with a revenue surge in 1965.  The latter gave Congress the means to for instance introduce Medicare; a program that was initially funded with $3 billion.  The problem modernly is that a program which once cost $3 billion is projected to cost $1 trillion by 2025.  Taking nothing away from the good of supply side policies, if not met with spending cuts, they’re not nearly as effective as they otherwise would be.

The problem with supply siders isn’t their belief that deficits don’t matter, but it’s a major problem their belief that government spending doesn’t matter.  This reviewer wishes Salsman had spent more time on this point.  As a deficit realist, Salsman plainly doesn’t like government expanding beyond strict constitutional limits.  Ok, but rising federal revenues have enabled just that, not to mention that it’s much easier for governments to issue new debt if incoming tax revenues are abundant.


☕ Dan Mitchell lists nine great reasons to slash the corporate tax rate.

The Most Persuasive Argument for Slashing the Corporate Tax Rate

Excerpt:

Let’s have a “tax war.” Folks on the left fret that this creates a “race to the bottom,” but that’s because they favor big government and think our incomes belong to the state.

As far as I’m concerned a “tax war” is desirable because that means politicians are fighting each other and every bullet they fire (i.e., every tax they cut) is good news for the global economy.

Now that I’ve shared some good news, I’ll close with potential bad news. I’m worried that the overall tax reform agenda faces a grim future, mostly because Trump won’t address old-age entitlements and also because House GOPers have embraced a misguided border-adjustment tax.

Which is why, when the dust settles, I’ll be happy if all we get a big reduction in the corporate rate.



Today’s Brew ☕ 5-17-17

 

Dan Mitchell does what Dan Mitchell does with the Laffer Curve: He learns from it, applies lessons elsewhere, and makes us all smarter.

Learning from the United Kingdom about the Laffer Curve, Dynamic Scoring, and Class-Warfare Taxes

Excerpt:

As far as I’m concerned, no sentient human being could look at what happened in the United States in the 1980s and not agree that high tax rates on upper-income taxpayers are foolish and self-destructive.

Not only did the economy grow faster after Reagan lowered rates, but the IRS even collected more revenue (a lot more revenue) because rich people earned and reported so much additional income.

That should be a win-win for all sides, though there are some leftists who hate the rich more than they like additional revenue.

Anyhow, I raise this example because there are politicians today who think it’s a good idea to go back to the punitive tax policy that existed in the 1970s.