Steve Moore and Art Laffer in today’s Wall Street Journal.
Happy Birthday Jack Kemp! https://t.co/YOv4XVaRZe
— Unleash Prosperity (@Comm4Prosperity) July 14, 2017
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.
Nice to see Stephen Moore slip one past the editors and get this published in enemy territory, the Washington Post, aka, Pravda on the Potomac. And, you have to love the name “Laffer Curve deniers.”
In the four decades since, the Laffer Curve and its supply-side message have taken something of a beating. They’ve been ridiculed as “trickle down” and “voodoo economics” (a phrase coined in 1980 by George H.W. Bush), and disparaged in mainstream economics texts as theories of “charlatans and cranks.” Last year, even Pope Francis criticized supply-side theories, writing that they have “never been confirmed by the facts” and rely on “a crude and naive trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system.” And this year, French economist Thomas Piketty penned a best-selling back-to-the-future book arguing for a return to the good old days of 70 percent tax rates on the rich.
But I’d argue — and not just because Laffer has been a longtime friend and mentor — that his theory has actually held up pretty well these past 40 years. Perhaps its critics should be called Laffer Curve deniers.
Solid supporting evidence came during the Reagan years. President Ronald Reagan adopted the Laffer Curve message, telling Americans that when 70 to 80 cents of an extra dollar earned goes to the government, it’s understandable that people wonder: Why keep working? He recalled that as an actor in Hollywood, he would stop making movies in a given year once he hit Uncle Sam’s confiscatory tax rates.
When Reagan left the White House in 1989, the highest tax rate had been slashed from 70 percent in 1981 to 28 percent. (Even liberal senators such as Ted Kennedy and Howard Metzenbaum voted for those low rates.) And contrary to the claims of voodoo, the government’s budget numbers show that tax receipts expanded from $517 billion in 1980 to $909 billion in 1988 — close to a 75 percent change (25 percent after inflation). Economist Larry Lindsey has documented from IRS data that tax collections from the rich surged much faster than that.
G. Tracy Mehan III writes for The American Spectator about an event that took place in Washington last week featuring supply-siders galore.
Reconciling economics with concerns over inequality.
Last week, at the Heritage Foundation in Washington, CNBC Commentator and economist Larry Kudlow hosted a very lively, even provocative, blue-ribbon panel discussion on the theme, “And Now for a Congressional Growth Agenda.” Besides the supply-side guru, Arthur Laffer, discussants included the impressive Carly Fiorina, former CEO of Hewlett-Packard, unsuccessful California Senate candidate and possible presidential candidate; the astute economic commentator, James (“Jimmy”) Pethokoukis of the American Enterprise Institute; and Stephen Moore, Heritage’s own Chief Economist and former Wall Street Journal editorial board member.
Rex Sinquefield at Forbes.com talks about why the critics of Kansas’ implementation of supply-side economics have egg on their face after the 2014 election.
Justin McFarland, Kansas Director of Labor Market Information, rightfully proclaimed that the employment gain “continues to lead Kansas’ comeback from the Great Recession” and that the “increased income will continue to drive growth.”
This is good news for working families and their employers. Not so much for Brownback’s well-funded opponents, including the National Education Association and the American Federation of Teachers, which spent $60 million to defeat fiscal conservatives in the mid-term elections.
Powerful adversaries of Brownback’s pro-growth tax policies painted a dire “sky is falling” picture of the countless misfortunes that were sure to destroy the state’s economic future. While they may want to say and believe as they wish, the proof is in the numbers.
And while data is critical to the political process of creating good state fiscal policy, the most important figure is the 2.9 million people who live in Kansas whose lives are impacted by these policies. Kansans elect the people who are tasked with solving problems, and as the facts emerge, it appears that they have chosen wisely. The quantitative, 50-state data that is thoroughly documented in An Inquiry into the Nature and Causes of the Wealth of States (which I co-authored with Stephen Moore, Art Laffer, and Travis H. Brown) shows that every measure of economic prosperity is linked to taxation. Those states that limit or eliminate distortionary taxes, the worst of which are those placed on personal and business income, are able to expand their local economies.
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And this, from Allister Heath in London’s Telegraph on the upcoming Autumn Statement by George Osborne:
Changing tax rates also has an effect on incentives to work, invest, consume and transact which need to be taken into effect when setting policy and budgeting
So, given that there won’t be that much actual action, and only miniscule tweaks to the aggregate sums raised and spent, what we need to see instead is evidence of fresh philosophical and economic thinking from the Chancellor. We need him to embrace much more comprehensively supply-side economics and to paint a positive vision of an economy and society that are no longer weighed down by an oppressively large and unaffordable government sector.
In particular, the Chancellor needs to make it clear that he believes that lowering taxes on work would produce more of it, that cuts to the tax on the returns on capital would bolster corporate expenditure, productivity, jobs and growth, and that a smaller state is inherently a good thing, in terms of both improving the economy’s performance and by increasing the autonomy of individuals and families.
Stephen Moore and Jon Kyl take to the Wall Street Journal to talk about the President’s insane tax policy:
The ripple effect of the president’s tax hikes is swamping take-home pay.
The high corporate tax rate is also holding the economy back. Twenty years ago the U.S. rate was about at the international average, but now we are about 15 percentage points above the rate of most of our competitors and nearly three times higher than countries like Ireland. The American Enterprise Institute has found that “a 1% increase in corporate tax rates is associated with nearly a 1% drop in wage rates” because when corporations invest less here at home, worker productivity suffers.
Mr. Obama’s investment tax hike was designed to soak the rich. But it is the middle class who have taken a bath. Republicans should be telling American wage-earners that the best way to increase their take-home pay is to repeal Mr. Obama’s tax hikes and chop the corporate tax rate to the international average, so more and better jobs are created on these shores, not abroad.
Stephen Moore uses his Investor’s Business Daily column to magnify the “Left’s War on Business”:
Hillary Clinton is getting deservedly attacked for her imbecilic statement at a Democratic political gathering in Massachusetts on Friday about business and jobs.
“Don’t let anybody tell you that, ah, you know, it’s corporations and businesses that create jobs,” she preached, to loud applause. “You know that old theory, trickle-down economics. That has been tried, that has failed. It has failed rather spectacularly.”
It may not be too surprising that Hillary can’t connect the dots that it takes an employer to create an employee to create wages and salaries.
That’s how some 150 million Americans get paid every week. Ms. Clinton has made her millions in the cattle futures market, as a government employee and giving speeches for fees of $250,000 a pop. Nice work if you can get it. The rest of us mere mortals need a paycheck.