Today’s Brew 7-15-17

Radio gold this morning as Larry Kudlow not only got Steve Forbes and Art Laffer to appear on his show at the same time, Larry had them on for about 45 minutes, over three segments. It was a very good discussion.

This link will take you to the mp3 of the entire interview, you can listen right in your browser or download the file to your computer or device.


 

Today’s Brew 6-9-17

Larry Kudlow looks forward in this National Review Online piece toward the tax reform and other battles now that the James Comey hearings are over.

Three Easy Pieces: A Simple, Get-It-Done-Now Economic Plan

Excerpt:

President Donald Trump cannot let a deluge of distractions disrupt his and the Republican party’s plans for meaningful health-care and tax reform. The Russian-collusion accusations, the fallout from the Comey hearing, the left-wing media’s daily barrage of anti-Trump propaganda — these are all distractions. And the administration and GOP Congress are in great jeopardy if they get caught up in it and take their eyes of the policy ball.

They must get some degree of health-care and tax reform done. This year. With tangible results in the next several months. If they don’t get it done, they’re going to get creamed in the 2018 midterms.


 

Today’s Brew 5-4-17

Dan Mitchell loves the Laffer Curve, and we love learning when and where he see the Laffer Curve doing its thing.

The Continuing Revenge of the Laffer Curve

Excerpts:

Journalists are especially susceptible to silly statements when writing about the real-world impact of tax policy.

They don’t realize (or prefer not to acknowledge) that changes in tax rates alter incentives to engage in productive behavior, and this leads to changes in taxable income. Which leads to changes in tax revenue, a relationship known as the Laffer Curve.
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But don’t hold your breath. We have an overseas example of the Laffer Curve, and one of the main lessons is that politicians are willing to sacrifice just about everything in the pursuit of power.
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P.S. I’m not quite as pessimistic about the future of tax policy in the United States. The success of the Reagan tax cuts is a very powerful example and American voters still have a bit of a libertarian streak. I’m not expecting big tax cuts, to be sure, but at least we’re fighting in the United States over how to cut taxes rather than how to raise them.


Larry Kudlow joined the Big John and Ray Show out of Chicago. They mostly talked about health insurance issues, important to hear from a supply-sider on this.


Today’s Brew 4-30-17

Kemp Kasten Bradley Gephardt Tax Reform Act 1986

Former Senator Bill Bradley has an important and timely piece in the Sunday New York Times. As someone who was part of the 1986 Tax Reform Act, he has some good knowledge to share.

When Congress Made Taxes Fairer

Excerpts:

With seven respected committee members backing the bill, Bob Packwood cajoled, threatened and persuaded others on the committee to embrace it, outmaneuvering senators who wanted higher rates and real estate lobbyists eager to protect tax shelters. There were a few perilous moments. We came up short on revenue at one point, increasing the deficit in a supposedly revenue-neutral bill. Initially we missed our agreed income-distribution goals. But in the end, the bill passed committee 20 to 0; and then, after a big battle on I.R.A.s, it passed the Senate 97 to 3. That kind of vote really used to happen.
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The final bill chopped the top rate to 28 percent from 50 percent, closed nearly $100 billion a year in loopholes, taxed labor and capital at the same rate, and gave low-income Americans one of the biggest tax cuts of their lives. Most people got to save more of every dollar they earned, corporations were treated more equally, and the wealthy ended up paying a higher share of total income tax revenue because they’d benefited disproportionately from the loopholes we’d eliminated.
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Over the years, bill after bill has chipped away at the changes we made, and people today once again see unfairness everywhere in the code. Tax liability appears to be totally random. Loopholes cost over $1 trillion, and equal incomes don’t pay equal taxes. The question is the same as in 1986: Can our leaders put principle and country over politics and party, and work together for the common good?

Given the extreme polarization within and between the parties, the odds are against success. Legislating is a very human experience in which trust and mutual respect play critical roles. But 1986 proved that when both are present, big things can get done.


Richmond Times-Dispatch

A. Barton Hinkle of the Richmond Times-Dispatch has some interesting things to say about tax cuts, he takes a swipe at the Laffer curve along the way, that mistake aside, he does make some valid points.

Tax cuts won’t cost you anything, unless you’re Uncle Sam

Excerpts:

Most discussions of tax policy overlook a crucial initial condition: the ownership of the money before the government confiscates it. That is a moral consideration, or at least it ought to be. Pundits go on at great length debating whether the government can afford to let people keep a bit more of their own money. Very few ever ask whether the taxpayer can afford the high cost of government.
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Any discussion of tax policy ought to start with the recognition that taxation entails taking the earnings of some people for the benefit of others. We need some level of taxation; government can’t function without it. But the level should be kept as low as possible.
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This is, indeed, a question about greed. But not in the way it is normally framed. As George Mason University economics professor Donald Boudreaux once said, it’s an odd value set that considers “I want what’s mine” to be selfish and greedy but “I want what’s yours” to be selfless and noble.

Over the next two decades federal spending is set to soar from 20 percent of GDP to 28 percent, and much of that spending growth is on automatic pilot. Nobody ever asks how that spending is going to “pay for itself.” Given that taxes already cost Americans more than food, clothing, and shelter combined, maybe they should.


Larry Kudlow was a guest of John Catsimatidis on The Cat’s Rountable, here is the podcast.

Today’s Brew ☕ 4-23-17

 

Larry Kudlow interviewed Art Laffer on his radio on Saturday. The entire show is here, and it’s a great show, but the Laffer interview starts at about 3:35. Enjoy.


Professor Brian Domitrovic hosted a seminar in Texas on Saturday on supply-side history. The readings included John Rutledge and a chapter from Robert Bartley’s The Seven Fat Years. The seminar was a joint project between students from Sam Houston State University and University of St. Thomas.

Today’s Brew 4-9-17

The New York Sun

☕ Larry Kudlow appears in the New York Sun with this piece:

JFK-Style Strategic Tax Cuts Are Starting To Emerge As Way To Drain the Swamp

Excerpt:

In recent years, this static modelling has led to the notion that tax cuts need a “pay-for.” If you don’t cut the budget enough, you don’t get your tax cut.

Almost weirdly, the scorekeepers are happy with tax hikes, allegedly to balance the budget. But tax hikes depress economic growth, which reduces GDP. And with a smaller income base, actual revenues decline, simply because most everybody is worse off.

In truth, the best way to balance the budget is to reduce tax rates and provide new incentives for faster growth, which then expands the income base and throws off more revenues.

Brian Domitrovic and I, in “JFK and the Reagan Revolution,” quote President Kennedy’s 1962 speech to the New York Economics Club. With high drama, the Democrat turned against the New Deal, saying, “it is a paradoxical truth that tax rates are too high today [91% top rate] and tax revenues too low, and the soundest way to raise revenues in the long run is to cut rates now. . . . The reason is that only full employment can balance the budget, and tax reduction can pave the way to that employment.”

Twenty years later, Republican Ronald Reagan duplicated the JFK tax cuts to liberate a stagflationary economy. Today, the JFK-Reagan approach would rescue a stagnant economy. But the scorekeepers stand in the way. They’re part of the swamp. They’re telling President Trump that one cannot lower tax rates without pay-fors.


Today’s Brew 3-29-17

On CNBC, Larry Kudlow is bullish on business tax cuts.

Kudlow: Trump Should Push for Business Tax Cuts First

Excerpt:

“Tax reform takes a long time,” he said.  “I don’t know why they’re saying August. I think really a year or more is what it normally takes. I do think that the failure to deal with the healthcare bill puts more pressure on the Republicans and on the Trump administration to get a win on the board.”

Kudlow, was an economic adviser to the Trump campaign, said the key to a tax reform victory is to focus on business taxes first, even if that means running deficits over the next few years.

“Get the business stuff done,” said Kudlow, a radio talk-show host and CNBC senior contributor. “It will help the economy. We haven’t had business investment in 20 years. It’s a bipartisan critique I’m making. Go for the gold.”