☕ Dan Mitchell has a wide-ranging new post this morning:
Both these views are wrong. President John F. Kennedy was right about a rising tide lifting all boats.
And we see that in the incredible data that’s been shared by scholars such as Deirdre McCloskey and Don Boudreaux.
And since we just quoted Kennedy, let’s close with an equally appropriate quote from Winston Churchill, who famously observed that “The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.”
And the best example of that is in the data comparing the US with Denmark and Sweden. Or the words of Margaret Thatcher.
The moral of the story is that Slovakia has the right approach on taxes while Sweden has the wrong approach. That’s true, whether you want a winning sports team or a winning economy.
Dan Mitchell provides an excellent post today.
Since I’m a big advocate of the Laffer Curve, that means I favor dynamic scoring. This is the common-sense observation that you can’t figure out the effect of tax changes on revenue without first estimating the impact on taxable income.
And I’ve shared some very persuasive data and analysis in favor of the Laffer Curve and dynamic scoring.
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The evidence strongly indicates we need less government rather than more. Unless, of course, you think the United States would grow faster if we were more like France or Greece.
* There are some “micro-economic” feedback effects in the current system, so even the JCT wouldn’t assert that revenues would double if tax rates rose by 100 percent.
Congressman Paul Ryan released a new book today, sparking 2016 speculation along with it. The Way Forward: Renewing the American Idea is a very good, easy read so far. Surely there will be other supply-side nuggets later, but this passage on page 55 really jumped off the page.
In interviewing with Jack Kemp for a job at Empower America, Ryan recalls this exchange:
He asked me, “What do you think is better-a tax credit or a tax-rate reduction? Should we reduce tax rates or should we give people tax credits?”
I knew what he was up to. Kemp was famous for convincing President Reagan of the merits of supply-side economics. As a member of Congress, he had authored the Reagan tax cuts, and his pro-growth ideas helped create the economic expansion of the 1980s and 1990s. Jack Kemp didn’t just join the Reagan Revolution; he was the chief architect of some of its greatest victories.
In asking certain questions, he was trying to see if I was “on the model,” which was a term we used for supply-siders of those days. I was. “A reduction in tax rates,” I replied, “because growth occurs at the margin.”