The central theme here is that the individual can plan and spend their money better than the gov’t can. The Laffer Curve says that there are two tax rates that produce the same tax income to the gov’t. One rate, say 17%, is low enough to induce individuals to go out, work, innovate, and get the economic engine going again. Another rate, say 70%, will produce exactly the same income for the gov’t because now it pays to hire lawyers to avoid paying taxes, discourage workers from going back to work because so little is left it’s not worth the effort, and the reward to investing is too small to take the risk.
This is not some pie-in-the-sky theory. It’s worked in the US, India, and Great Britain. Taxes distort the allocation of resources in every case where there are deductions to be had. A 17% flat (not Fair) tax with no deductions would raise the same amount of tax revenue we see now, but without the allocative effects. Also, you could file your tax return on a postcard instead of reading through 27,000 pages of tax code that even the IRS can’t give you a consistent answer to if you ask a question.
It ludicrous to hear politicians bitch about how the tax code favors the rich. Come on, guys...who the hell do you think wrote the code?
My point was that although the Laffer Curve is correct, that lower taxes lead to more government revenue, more government revenue is not the justification for low taxes. It isn’t government’s interest we in America care about. It is the interests of the individual we care about. It’s not “supply side” that justifies low taxes, but an individual’s right to his property.
A man’s right to his property is equal to his right to Life, Liberty, and Free Pursuits. As Madison said, “As a man is said to have a right to his property, he may be equally said to have a property in his rights.” A man has as much right to his property of money and land as he does to the property of his freedom.