"There is always a philosophy for lack of courage."—Albert Camus

Monday, June 20, 2005

The Laffer Curve

Stephen Moore has a nice column at Opinion Journal today on how Arthur Laffer has again been proven correct as we analyze the after-effects of the Bush tax cuts.

Ben and Alan, you're free market libertarian types with heavy-duty economic training. Was Laffer right? I think so. I once did a constant dollar analysis of the federal revenues post the first big Reagan cut and saw a real increase year by year. Rates were cut and revenues went up. No lefty can believe it.

One more thing. Let's assume the revenues would be the same for a 15% rate and a 70% rate (I believe you'd collect a lot more with 15%, but let's accept it.). Wouldn't it be de facto better to charge 15%? Why are the lefties so hell-bent on high rates?

1 comment:

Tlaloc said...

"I once did a constant dollar analysis of the federal revenues post the first big Reagan cut and saw a real increase year by year. Rates were cut and revenues went up. No lefty can believe it."

As they say the proof is in the pudding. Supply side economics may look good on paper but somehow when you walk outside you notice things aren't going so well.