Free Republic

We’ve finished economist Arthur Laffer’s new book, Eureka! How to Fix California, which he delivered to the Register this morning in person while visiting with our Editorial Board. It’s a good. But in a sense it’s a wonder why people have to devote countless hours of research to study such stuff, when the conclusions are so intuitively obvious. In short . . .

Newt Gingrich Endorsed by Architect of Reagan Economic Plan, Economist Arthur Laffer Dyersville, IA – Renowned economist, father of The Laffer Curve and supply-side economics, and architect of the Ronald Reagan economic plan, Arthur Laffer, announced his endorsement today of Newt Gingrich for President of the United States. “Newt has the best plan for jobs and economic growth of any candidate in the field,” said Laffer. “Like Ronald Reagan’s tax cuts and pro-growth policies, Newt’s low individual and corporate tax rates, deregulation and strong dollar monetary policies will create a boom of new investment and economic growth leading to the...

“I think Nine-Nine-Nine is a wonderful plan. I think a lot of the candidates have very good plans for tax reform, but I love the Nine-Nine-Nine Plan. I think it's a great first step.”-- Economist Arthur Laffer, top tax adviser to President Ronald Reagan, on “ Special Report" with Bret Baier.” Arthur Laffer, one of the high priests of Reaganomics, who told Bret Baier Herman Cain’s Nine-Nine-Nine Plan is “wonderful.” House GOP Budget Boss Paul Ryan told the Daily Caller he “loves” Cain’s plan. In Republican circles those are two very big boosters, especially for a guy who is said...

The majority of economists surveyed by the National Association for Business Economics believe that the federal deficit should be reduced only or primarily through spending cuts. The survey out Monday found that 56 percent of the NABE members surveyed felt that way, while 37 percent said they favor equal parts spending cuts and tax increases. The remaining 7 percent believe it should be done only or mostly through tax increases. As for how to reduce the deficit, nearly 40 percent said the best way would be to contain Medicare and Medicaid costs. Nearly a quarter recommended overhauling the tax system...

The chart Andrew Stiles referred to Friday (from an earlier post by Veronique de Rugy) shows only the start of how counterproductive it is to increase taxes on the wealthy. As a result of lower tax rates on the top income earners, not only do they pay a much larger share of all taxes, but they pay much more taxes total — and revenue to the government has increased. This is because lowering taxes on the rich creates more rich people and richer rich people. The federal government gets much more revenue if you impose a 40 percent tax on...

Stimulus: Remember the left's contempt for the Laffer Curve — which posited that certain tax cuts will pay for themselves by accelerating economic growth? Well, now they're pushing their own version of voodoo economics. Largely overlooked in the coverage of President Obama's latest press conference was his call for another round of deficit-fueled stimulus spending as part of a debt reduction package. If that sounds a bit incongruous, here's how Obama justifies it. "One of the most important things we can do for debt and deficit reduction is to grow the economy," he said, adding that "if there are steps...

“I’m mortified to have to pay 50%!” So said the phenomenally successful singer Adele in an interview with Q magazine. And why shouldn’t she be? Isn’t it unfair that a person can perform labour for which they get less of the reward than someone else who didn’t perform it? The right to work as you wish and dispose of the fruits of your labour as you wish are essential rights that differentiate free men and women from slaves. Agreeing with Adele seems a moral slam dunk. Not if you write for or read the Guardian. They took Adele to task...

In the ongoing battle between the fiscal conservatives and the liberal Democrats, there appears little chance of any meaningful movement toward fiscal sanity without the so-called ultimate weapon of a shutdown being employed. The conservative element of the Republicans in the House and Senate claim that only massive spending cuts can save the country from going off a financial cliff into bankruptcy. The Democrats counter that spending really isn't the problem -- the country can afford the spending and more; it is that the rich are not paying enough in taxes. That same argument is used in various state capitals...

Sen. John Ensign Proves that Bush Tax Cuts Increased Federal Revenue and in fact the deficit is caused entirely due to the spending. I love his chart and it is indicative of what it takes to push back against Democratic Talking Points and I think represents the kind of communication that Conservatives have to emulate.

In the current jobs debate, one simple economic truth is often neglected: Low tax rates produce more government revenue, not less, and allow more private-sector jobs to be created. Why? Low tax rates leave more capital in private hands to be invested in the marketplace. As simple as this sounds, it's nonetheless often ignored by policy-makers. In short, capital in the hands of private entrepreneurs is invested, which is more efficient than giving it to the government to spend. Not that job creation takes place at the same pace everywhere when rates are cut. Large corporations, small businesses (including individual...

Liberals don't like the Laffer Curve. If you have any doubts, Google "‘Laffer Curve' +discredited" and peruse the 13,400 hits you get. Well, if Liberals hate the Laffer Curve (and they do), they are really going to hate the Woodhill Curve. Professor Laffer originally stated his principle as follows: "For any tax, there are always two tax rates (a high one and a low one) that will produce the same revenue." The example he cited was that tax rates of zero and 100% would both bring in the same amount of revenue-namely, zero. The Woodhill Curve extends the concept of...

The debate rages over whether our country can afford to extend the Bush tax cuts for the rich. Progressives argue that the ballooning Federal debt is a legacy of these tax cuts. There is one unreported flaw in this argument. As data from the IRS show, George Bush did not cut income taxes. He increased them. In fact, Bush increased income taxes not only for the rich but for at least half of all tax filers. Only the poor paid less income tax under George Bush than under Bill Clinton. WHAT? Go to the IRS website and add up the...

Tax hikes expected to hit after the expiration of the Bush tax cuts will cause today's corporate profits to tumble next year — probably right after a stock market collapse, says economist Arthur Laffer, chairman of Laffer Associates and inventor of the Laffer Curve. “My best guess is that the train goes off the tracks and we get our worst nightmare of a severe 'double dip' recession,”.

[snip] U.S. fiscal policy has been going in the wrong direction for a very long time. But this year the U.S. government declined to lay out any plan to balance its budget ever again. Based on President Obama's fiscal 2011 budget, the Congressional Budget Office (CBO) estimates a deficit that starts at 10.3% of GDP in 2010. It is projected to narrow as the economy recovers but will still be 5.6% in 2020. As a result the net national debt (debt held by the public) will more than double to 90% by 2020 from 40% in 2008. The current Greek...

President Barack Obama's new health-care legislation aims to raise $210 billion over 10 years to pay for the extensive new entitlements. How? By slapping a 3.8% "Medicare tax" on interest and rental income, dividends and capital gains of couples earning more than $250,000, or singles with more than $200,000. The president also hopes to raise $364 billion over 10 years from the same taxpayers by raising the top two tax rates to 36%-39.6% from 33%-35%, plus another $105 billion by raising the tax on dividends and capital gains to 20% from 15%, and another $500 billion by capping and phasing...

On November 7, 2009, the House passed H.R. 3962, the Affordable Health Care for America Act. The bill would expand Medicaid, grant subsidies to moderate-income households buying health insurance on newly established exchanges, and provide health insurance tax credits to some small businesses. These expenditures would be financed, in part, by a new 5.4 percent surtax on households with very high incomes, including married couples with incomes above $1 million. The proposed millionaire surtax is politically attractive because its direct burden would fall on a very small group, roughly 0.3 percent of the population. Moreover, this group is extremely wealthy...

~SNIP~Congress passed a sizable fiscal stimulus. Yet things turned out worse than the White House expected. The unemployment rate is now 10 percent — a full percentage point above what the administration economists said would occur without any stimulus. To be sure, there are some positive signs, like reduced credit spreads, gross domestic product growth and diminishing job losses. But the recovery is not yet as robust as the president and his economic team had originally hoped. So what to do now? The administration seems most intent on staying the course, although in a speech Tuesday, the president showed interest...

Will increasing tax rates on the rich increase revenues, or hold back the economy? Mr. Hauser uncovered the means to answer these questions definitively. On this page in 1993, he stated that "No matter what the tax rates have been, in postwar America tax revenues have remained at about 19.5% of GDP." What a pity that his discovery has not been more widely disseminated. The chart nearby, updating the evidence to 2007, confirms Hauser's Law. The federal tax "yield" (revenues divided by GDP) has remained close to 19.5%, even as the top tax bracket was brought down from 91% to...

New York State is quickly becoming the next California, as tax revenues drop 36% from 2008 levels, and a dejected governor expressing his frustration with policy measures that continue to not bear fruit. As a reminder the state most reliant on the financial sector, is struggling with a $2.1 billion budget deficit that is still looming despite tax increases, federal aid and spending cuts. New York State’s income tax revenue has dropped 36 percent from the same period in 2008, Governor David Paterson said, “frustrating” his attempt to close a projected $2.1 billion budget deficit. “We added personal income tax,...

The Laffer Curve is a simple idea: a government can’t raise taxes forever and expect to increase revenue along the way. Eventually you’re taking so much in taxes that people don’t have any reason to earn income. The argument is simple (and correct): if you have zero tax rate you get zero tax revenue. If you raise taxes just a bit, nobody will be discouraged from working, and you will collect some amount of revenue; therefore, the curve of revenue versus tax rate starts at zero and initially rises. But if the tax rate is 100%, nobody has any reason...