Taxes

From the Nov/Dec issue of The American, by Stephen Moore.

"6. What is the economic logic behind these lower tax rates?
As legend has it, the famous “Laffer Curve” was first drawn by economist Arthur Laffer in 1974 on a cocktail napkin at a small dinner meeting attended by the late Wall Street Journal editor Robert Bartley and such high-powered policymakers as Richard Cheney and Donald Rumsfeld. Laffer showed how two different rates—one high and one low—could produce the same revenues, since the higher rate would discourage work and investment. The Laffer Curve helped launch Reaganomics here at home and ignited a frenzy of tax cutting around the globe that continues to this day. It’s also one of the simplest concepts in economics: lowering the tax rate on production, work, investment, and risk-taking will spur more of these activities and will often produce more tax revenue rather than less. Since the Reagan tax cuts, the United States has created some 40 million new jobs—more than all of Europe and Japan combined."

- Stephen Moore

I would like to add that this issue really frosts my chaps. The budget deficit is caused by overspending not undertaxing. Of course the rich are going to benefit the most from tax cuts since they are the ones actually paying the taxes!

When you punish success it affects everyone negatively. Reward success and everyone has a fair shot at getting ahead. It won't be easy (Pursuit of Happyness) but it will be possible.

Here is a prominent Senator speaking on taxes in 2004, "We're going to take things away from you on behalf of the common good." How is that anything other than legalized covetousness?

But what about the poor, you say? Well, Americans have always been among the most generous people on earth. Private citizens efforts on behalf of the poor are always more effective, compassionate and cost efficient than anything the government could dream up.

Thomas Sowell has a great analogy in his book, The Quest for Cosmic Justice. He is speaking about government efforts to make life more fair and he uses the following illustration to make his point. I'm paraphrasing here- "If a ship with 300 people on board is sinking and there is only room for 200 people on board, the fair thing is that all 300 people should drown. It is not fair to the 100 to let them drown while the 200 live." Obviously no sane person would recommend that we let all 300 drown just to make it fair, even knowing as Sowell points out that the most selfish scoundrels among the lot would probably end up in the life boat. And yet this policy of fairness, or "cosmic justice" as Sowell calls it is the guiding principle of so many in government today. Damn the whole lot for the sake of the few, rather than to let the horses run free and wild, knowing that some will get left behind. Let them fall behind I say, statistics prove that there will always be plenty of us who will turn around to help them on their way.