Arthur Laffer Is So Full Of It -- Here's What Tax Cuts Really Do To The Economy

The Business Insider ^ | 6-7-2010 | Asha Bangalore, Northern Trust

[blam]

All This Talk Of A Double-Dip Recession Is Almost Certainly Nonsense

[dfwgator]

I read this tripe and it’s five minutes of my life that I’ll never get back.

[usconservative]

but they do have a vested interest in high taxes, since high taxes mean that people need help structuring their assets to minimize taxes.

Incorrect. Northern Trust generates its revenues primarily on fees generated by managing the total asset values of clients accounts. That is, the higher the value of the account the greater the fees generated.

[griswold3]

We have a winner!
Welfare reform was an important signal to the producers. It said DC was serious about controling spending.
The tax increase (meant to decrease the deficit) was the trade off. Though you didn’t feel as if you (producer) were in the cross hairs like now.

[usconservative]

Only if you haven’t covered everything. :-)

[FourPeas]

I'm doing my best to avoid being snarky...Mr. Laffer has a very good record which I think speaks for itself.

[denydenydeny]

why did the economy post noticeable growth after tax increases were implemented in 1993?

Also, the Republican takeover of Congress in 1994 had a tremendous positive effect on the economy. In January and February 1995 the stock market just explodes.

[meyer]

September 11th, 2001. That's why. Asha, you're a complete moron.

The left doesn't acknowledge that 9/11 had any effect on the economy. Actually, they're ticked that it didn't have a larger effect. They want it to sink.

I always find it odd that so-called economic experts like this Asha fail to account for other major events when they evaluate economic events.

[Larry Lucido]

Blam, what is your relationship to the “business insider”? Respectfully, you seem to excerpt a lot of crap that these “insiders” put out day after day.

Seriously, none of these folks seem to have been inside any business other than a pinball arcade. Well, I guess technically an insane asylum is a “business.”

Blam, I love you but anyone who calls himself an “insider” is not to be taken seriously.

Anyone who is so full of himself that he has to be excerpted is also not to be taken seriously.

So seriously, get some new sources. Please.

[alrea]

why did the U.S. economy record the weakest period of economic expansion following the Bush tax cuts of 2001

7. Competition with Chinese slave labor companies

[Onelifetogive]

I have always disagreed with the terms "cutting taxes" and "raising taxes." Both are VERY misleading. Cutting rates may raise or lower revenue depending on the circumstances (i.e. whether they are cut from a point above or below the peak on the laffer curve*.)

*Anyone who disagrees that the laffer curve is basically correct is an idiot. The laffer curve says that revenues at 0% tax rate and 100% tax rate will be $0 (or VERY close to it.) and that there is a revenue maximum somewhere between the 0% and 100% tax rates. This is obviously true.

[woofie]

The fact that we came back so quickly from 9/11 is truly a testament to the greatness of this country

[arrogantsob]

This dope has to pretend that 911 had no negative economic impact when, in fact, it killed travel, the airlines, tourism just for starters. After 911 we entered an era of historically low interest rates which continues to this day which along with the tax cuts allowed growth to continue. Unfortunately PERMANENT tax cuts are required to move the growth rate to the highest levels these were not possible because the Dumbass Party would not support them. So the author does not reference this little subtlety in order to downplay the positive impact of tax cuts.

Any positive economic impact of Clinton’s cuts came from expectations of lower inflation rates which lowered interest rates. Recovery from a mild recession could not be prevented by tax increases since the longer term trend was explosive growth from the Reagan tax cuts.

[ilgipper]

Yes, and the Republicans brought with them a series of tax cuts between 95-1999 which helped foster the bombing economy. Clinton went along for the ride to benefit his own political legacy and economic growth.

[skeeter]

Laffer has a 25 year nearly unbroken growth streak to back up his claim.

What does this Bongalore guy have?

[Moonman62]

If Laffer's thesis about tax cuts is valid, why did the U.S. economy record the weakest period of economic expansion following the Bush tax cuts of 2001 and 2003?

W's tax cuts were terrible (demand side all the way), but the tax cuts in 2003 that were largely written by the Republicans in Congress, had some supply side and small benefits, and the economy did expand some after that.

[griswold3]

The left consistently claims tax cuts were our downfall but could never explain that throughout the history of the income tax etc, the federal government never collected more than 20% of GDP. The rest was deficit spending.
(Hauser’s Law)

[Sergio]

Bookmark.

[skeeter]

If Laffer's thesis about tax cuts is valid, why did the U.S. economy record the weakest period of economic expansion following the Bush tax cuts of 2001 and 2003?

Lets wait until they expire next year & see what happens.

[Moonman62]

Stepping forward from Laffer's utopic economic era, why did the economy post noticeable growth after tax increases were implemented in 1993?

Clinton and the Democrats got clobbered in the elections of '94, so the tax increases must not have been all that good. After '94 Clinton mostly adopted what the GOP wanted on the economy including a capital gains tax cut.