Posted on 06/07/2010 7:40:17 PM PDT by blam
Arthur Laffer Is So Full Of It -- Here's What Tax Cuts Really Do To The Economy
Asha Bangalore, Northern Trust
Jun. 7, 2010, 9:20 PM
In the post below, Asha Bangalore of Northern Trust responds to Art Laffer's WSJ op-ed demanding more tax cuts. The title above, of course, is ours (Asha's far too professional and polite for a title like that). Asha's title is "Missing Elements" of Mr. Laffer's Incomplete Story.
Mr. Laffer illustrates his arguments about tax cuts and the positive impact on economic growth with the Reagan tax cut experience (see chart 1, replication of chart in Mr. Laffer's article) in today's Wall Street Journal (Arthur Laffer: Tax Hikes and the 2011 Economic Collapse - WSJ.com) and he predicts a dire economic situation if the Bush tax cuts are allowed to expire at the close of 2010.
Stepping forward from Laffer's utopic economic era, why did the economy post noticeable growth after tax increases were implemented in 1993? The recession ended in March 1991 and the banking system was beset with issues, which delayed the robust recovery until later. A revival of bank lending led to the self-sustained growth witnessed despite the tax increases instituted in 1993 by the Clinton administration. 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? The evidence from tax cuts is essentially not as strong as Mr. Laffer's leads the reader to believe...
[snip]
(Excerpt) Read more at businessinsider.com ...
I read this tripe and it’s five minutes of my life that I’ll never get back.
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.
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.
Only if you haven’t covered everything. :-)
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.
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.
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.
7. Competition with Chinese slave labor companies
*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.
The fact that we came back so quickly from 9/11 is truly a testament to the greatness of this country
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.
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.
What does this Bongalore guy have?
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.
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)
Bookmark.
Lets wait until they expire next year & see what happens.
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.
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