Free Republic

Gov. Tom Wolf and the Republican-controlled state legislature have found something to agree on: Pennsylvania’s corporate net income tax, the second-highest in the nation, costs the state more in lost business than it collects in revenue. The legislature should immediately pass the outgoing governor’s proposal to cut the corporate tax from 9.99% to 7.99% starting in 2023. That would move the state outside the top 10 highest CNI states, although it would still leave Pennsylvania at a disadvantage compared to nearby competitors like New York (6.5%) and Virginia (6%). After that, there are two ideas on the table for lowering...

Ronald Reagan in great form

It’s no wonder that voodoo is no longer being used as a smokescreen. In 2017, when the tax reform package was being hashed out, the Democrats were disparaging the legislation, calling it, “tax cuts for the rich” or “trickled down economics” and of course, “voodoo economics.” Those talking points have vanished faster than the media hype over Beto O'Rockstar and his skateboard. Perhaps these characterizations are no longer in most Democrat’s lexicons because it would remind voters just how wrong they were. With the economy booming, the last thing the left wants is for Republicans to point out that...

When Ronald Reagan slashed tax rates in America in the 1980s, the obvious direct effect was more prosperity in America.But the under-appreciated indirect effect of Reaganomics was that it helped generate more prosperity elsewhere in the world.Not because Americans had higher income and could buy more products from home and abroad (though that is a nice fringe benefit), but rather because the Reagan tax cuts triggered a virtuous cycle of tax competition. Politicians in other countries had to lower their tax rates because of concerns that jobs and investment were migrating to America (Margaret Thatcher also deserves some credit since...

Love to see everyone enjoying the afterglow of this amazing GOP Convention. Haven’t felt like this politically since 1980. I think morning is once again coming to America. Art Laffer, economist, has analyzed Trumps chances and it brought up some thoughts I have on the Laffer Curve. I love the curve but I hate the terminology... Laffer and Reagan brought us an unprecedented and historic 25 years of growth and prosperity until the Left finally shut it down. Tax cuts are a must, but we need to flip the reasoning - we need to change the terminology and the paradigm...

Art Laffer is a famous economist, one of the brains behind President Ronald Reagan's supply-side tax cuts in 1981. But he was also a political adviser to Reagan and other presidential candidates. Based on history rather than polls or demographics, he insists Donald Trump will win the presidential race—and win easily. History is an argument not often heard in presidential elections except in one case: the likelihood that after one party holds the White House for eight years, that party probably won't win four more years. The one exception in the past half-century was the election of George H.W. Bush...

Kleinbard’s second argument against dynamic scoring is based on his assumption that bigger government is good for the economy since the government spends money wisely.I’m not joking. Federal deficits are on an unsustainable path (as it happens, because of undertaxation, not excessive spending). Simply cutting taxes against the headwind of structural deficits leads to lower growth, as government borrowing soaks up an ever-increasing share of savings. …these models are political statements. They show the biggest economic effects by assuming that tax cuts are financed by unspecified future spending cuts. The smaller size of government, not the tax cuts by themselves,...

A pair of University of Maryland economists actually found themselves channeling supply side-icon Jack Kemp although they might be loathe to admit it. At a Brookings Institution conference, associate professor Melissa Kearney and assistant professor Lesley Turner noted thtat today’s SNAP [the federal Supplemental Nutrition Assistance Program]requirements have a “secondary earner penalty.” In layman’s terms, that meant that if both married spouses in a couple worked, they would be taxed or penalized for having both spouses work. Both Kearney and Turner proposed that the tax code be reformed to cut out taxes on these secondary earners in order to boost...

Arguably, one of the biggest accomplishments of supply-side economist Art Laffer in the late 1970s and early 1980s was to get mainstream economists to take marginal tax rates seriously. We all knew that the deadweight loss from a tax is proportional to the square of the tax rate so that, say, doubling the tax rate quadruples the deadweight loss. But, for some reason, economists talked very little about this. And this was during an era when the top federal marginal tax rate on income in the United States was a whopping 70 percent and the top federal marginal tax rate...

The Republican Party has long promoted itself as the party of business. Republicans understand the needs of business, we are told, and if the country would leave the economy in their hands business would boom. All we need to do is to give those at the very top of the income distribution – the “job creators” – more income through tax breaks, and then sit back and wait for the magic happen. Our investment in the wealthy will produce remarkable economic growth, and everyone will be better off. The Bush tax cuts were a test of these claims about supply-side...

There’s no question that America’s recovery from the financial crisis has been disappointing. In fact, I’ve been arguing that the era since 2007 is best viewed as a “depression,” an extended period of economic weakness and high unemployment that, like the Great Depression of the 1930s, persists despite episodes during which the economy grows. And Republicans are, of course, trying — with considerable success — to turn this dismal state of affairs to their political advantage. They love, in particular, to contrast President Obama’s record with that of Ronald Reagan, who, by this point in his presidency, was indeed presiding...

From the U.K. Spectator's report on the amazing success of supply-side economics in Sweden, and finance minister Anders Borg, the man behind it: "When Europe’s finance ministers meet for a group photo, it’s easy to spot the rebel — Anders Borg (pictured above) has a ponytail and earring. What actually marks him out, though, is how he responded to the crash. While most countries in Europe borrowed massively, Borg did not. Since becoming Sweden’s finance minister, his mission has been to pare back government. His ‘stimulus’ was a permanent tax cut. To critics, this was fiscal lunacy. Borg, on...

It is terrible that conservatives are out there distorting the records of each candidate. Or worse passing along wrong information without checking facts. All of them have qualifications and disqualifications. But can we get away from what they say they will do and compare what they actually did when they were afforded governing power? I was talking to a nationally published conservative author and speaker today who had absolutely no clue that Newt Gingrich gave the “keynote” rebuttal AGAINST Al Gore on Cap and Trade legislation. This is a travesty not just of conservative media, but those we surround ourselves...

Paul Hoffmeister is the chief economist at Bretton Woods Research, LLC. According to the polls summarized by RealClearPolitics, Mitt Romney has been unable to win more than 25% of the Republican vote for the party’s presidential nomination for more than a year. This is because the former Massachusetts governor is not a pro-growth Republican. Instead, his economic platform reflects a man who is devoutly Keynesian, and who, as president, would not be able to reinvigorate the U.S. economy. A pro-growth Republican is a “supply-sider” who believes that stable money, low taxes, and limited regulation produce prosperity. And as Art Laffer...

Let me get this straight: Republicans are arguing for a not-insignificant tax increase, and President Obama is sounding like Jack Kemp, saying higher taxes would lead to lower GDP growth. I knew I shouldn’t have followed that damned rabbit down the hole. As part of a harebrained attempt to stimulate the economy, a temporary reduction in the payroll tax was appended to the deal to prevent the Bush-era income-tax rates from expiring. There is good reason to think that these kinds of short-term stimulus measures don’t do much good. One of Milton Friedman’s key achievements was working out a formal...

I have been reading about fiscal policy under Ronald Reagan in my father's splendid book, Presidential Economics. What I have learned or re-learned is that Reagan was confronted with a giant problem in his 1980 campaign. The problem was budget deficits from the Johnson/Nixon/Ford/Carter years along with high inflation and a stubbornly high unemployment rate. The conventional economic advice called for raising taxes or monetary restraint to lower the inflation. But the problem there was that those measures would almost surely also generate higher unemployment. Along came what my father calls "the economics of joy," which was supply-side economics. This...

Supply side economics invokes the most basic element of human nature: self-interest. We all seek to improve our material circumstances. The tinier the tax man’s bite, the greater is our incentive to produce. As tax burdens lighten, motivation heightens, sparking a robust economy. Allowing producers to enjoy their hard earned gains is both just and effective. Contrasted with demand side economics it’s a no-brainer. It is neither just nor effective to funnel public money to political favorites hoping they will spend lavishly and thus stimulate production. Paying people not to produce inspires little effort. Depriving producers of needed capital so...

Many on the right, and particularly those who do not truly understand supply-side economics, are propagating the idea that the extension of the Bush tax cuts will bolster investment by business and will trigger a wave of economic activity, thereby helping to pull the U.S. out of its worst economic malaise since Jimmy Carter. This conclusion is wrong. Moreover, by propagating this pseudo-supply side position, proponents have needlessly made Republicans vulnerable to flanking maneuvers by America's left -- maneuvers that could lead to disastrous consequences for the 2012 elections. If the Bush tax cuts are extended, the average American will...

"Greetings, it's me again, giving more advice…." It was April 17, 2008, and Jack Kemp, the one-time Buffalo Bills quarterback turned congressman, presidential candidate, Bush 41 HUD Secretary and 1996 GOP vice presidential nominee, was at it again. This time, sadly, one of his last "in print" outings before his tragic early death from cancer just over a year later, he was writing an open letter in the Wall Street Journal to then-Illinois Senator and Democratic presidential aspirant Barack Obama. On tax cuts. And while he was at it, in typical Kemp style, reminding his fellow Republicans about the GOP's...

President Obama is showing signs that he, along with most of the rest of the country, is losing faith in liberal economic theory. Now I'm not suggesting he's going to go all Milton Friedman on us, but I think it is appropriate to reflect on a comment he made at his September 10 press conference and take a moment to rejoice in small victories. The following question was asked to the president: "On the economy, could you discuss your efforts at reviewing history as it relates to the poverty agenda, meaning LBJ and Dr. King?" The President's reply about...