Posted on 02/14/2014 1:34:36 PM PST by ThethoughtsofGreg
The idea that lowering tax rates can lead to higher revenue collections from increased economic activity is not a new one. Nor is this observation unique to tax policy. A business may lower the price of a good and see a higher profit as many more people choose to purchase that good for the cheaper price. But Arthur Laffer, an economist in the Reagan administration and co-author of ALEC’s Rich States, Poor States report, is credited with popularizing this idea through his “Laffer Curve.”
However, many advocates of ever-increasing tax rates accuse promoters of this common sense principle as only wanting to lower taxes for the wealthy or believing in “voodoo” economics. But every once in a while, reality forces an admission that the principle exists, and even its most ardent detractors cannot ignore the basic laws of economics.
Douglas Gansler, the current Attorney General of Maryland, recently commented on his plan for increasing the amount of drivers on an under-utilized Maryland toll road, the Inter-county Connector (ICC)
(Excerpt) Read more at americanlegislator.org ...
Maryland put a special income tax on their millionaires. So many of the millionaires move out of state that the Maryland actually collected LESS tax...
Socialists use taxes to punish people, not to raise revenue.
If the Democrats had their way, moving out of state to avoid taxes would be a criminal act, charged as theft (from the poor).
Exactly! The left would raise taxes even if it cost them revenues because they're all about envy and jealousy. They want to beggar anyone who has $1 more than they do. That's all.
Why not? Moving out of the US to avoid taxes is a crime anymore so why can't states force people to stay and support the tax base? After all, it was racist white people fleeing Detroit who caused it to go bankrupt.
However, they might agree to targeted and temporary tax cuts as a political ploy to jockey for power.
Voodoo Economics!
Talk of lower taxes in the People’s Republic of Maryland is a big Laffer. This is the state with a Rain Tax!
This is the same Art Laffer who said that he voted for Bill Clinton twice, voted for Barack Obama at least once, and missed calling the housing bubble.
“The idea that lowering tax rates can lead to higher revenue collections from increased economic activity is not a new one. “
It just doesn’t happen to be an idea that Reagan’s economic team believed, and it moreover it didn’t happen. See Martin Anderson’s long discussion on “the myth of the supply siders” in his memoir ‘Revolution’. Anderson was one of the architects of Reaganomics.
What they did believe is that economic activity would recoup a large percentage of the tax revenue lost due to the tax cuts. And their prediction was accurate, around 60 cents of each dollar cut was recouped through economic growth. The data can be found in Lawrence Lindsey’s ‘The Growth Experiment’.
“But Arthur Laffer, an economist in the Reagan administration”
Art Laffer was not an economist in the Reagan administration. He had his own private practice in the 80s and at best was a member of an outside advisory group that Reagan used.
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