What Every American Wants

The Wall Street Journal ^ | January 19, 2003 | MILTON FRIEDMAN

[conservativecorner]

I have long said, "I never met a tax cut I didn't like"--though I would go on to say that I like some better than others. The reason for my flat, unhedged statement is neither the Keynesian attribution of an economic stimulus to a tax cut, which I believe is generally wrong, nor the supply-side attribution of favorable incentive effects to a tax cut, which I believe is generally correct. It is, rather, the effect of tax cuts on government spending.

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[jwalsh07]

I agree with Milton. Anything that takes food out of the belly of the beast is a good thing.

[tet68]

Hey milt, ya know what this American wants?
More Ammo, bigger gun safes, crew served weapons,
oh and santa, a humvee to carry them in.
And remember milt, if it all breaks down, your name is on OUR list too.

[The Obstinate Insomniac]

bump

[Mitchell]

Many discussions of the economic effect of tax cuts and deficits implicitly assume that government spending is predetermined and independent of whether there is a tax cut or a deficit. In that world, deficits are produced entirely by a shortage of tax receipts. Raising taxes can eliminate the deficit without affecting spending. As I see the world, the situation is very different. What is predetermined is not spending but the politically tolerable deficit. Raise taxes by enough to eliminate the existing deficit and spending will go up to restore the tolerable deficit. Tax cuts may initially raise the deficit above the politically tolerable deficit, but their longer-term effect will be to restrain spending.

Milton Friedman makes an insightful point, as one would expect. Thanks for posting this.

[Lobster 6]

What list? Who is OUR? Is your post a threat? I hope not.

[The Great Satan]

Indeed.

[Sam Cree]

*

[okie01]

I have long said, "I never met a tax cut I didn't like"--though I would go on to say that I like some better than others.

And I have never read or heard anything by Milton Friedman that was not squarely on target.

[Sonny M]

I've always like'd Milton Friedman. He's forgotten more about economics then any idiot liberal will ever know. Its funny, but Zell Miller actually was talking about how the RATS should try pushing for tax cuts, there own tax cuts as a way of winning elections, but that they've never seen a tax cut that they like, or a tax that they didn't want to raise. Now they finally come up with some kind of cut (a bad one) and they want Bush to use it.

[Allan]

There was an article in the Wall Street Journal
a couple of years ago
that reported a study made by an MIT and a Harvard economist.

According to them
the present progressive tax system is by far the worst
for bringing in revenue to the government.

If percentage tax rates were inversely proportional to income
much more revenue would be generated.
Such a system, of course, would not be politically feasible
so that a flat tax would be the most reasonable compromise.

All this seems very credible to me,
the only thing I can't understand is
how such unorthodox thinkers ever got positions at Harvard and MIT.

[Mitchell]

If percentage tax rates were inversely proportional to income much more revenue would be generated. Such a system, of course, would not be politically feasible so that a flat tax would be the most reasonable compromise.

Like Margaret Thatcher's proposed head tax.

the only thing I can't understand is how such unorthodox thinkers ever got positions at Harvard and MIT.

Thinkers like that certainly aren't prominent at those schools! I wouldn't be surprised if their paper included a disclaimer implying that the idea would be terrible in practice due to the social consequences.