Reagan advisor Arthur Laffer makes the most bogus claim ever in favor of Bush's tax cuts for rich

[ProSense]

The Soak-the-Rich Catch-22

By ARTHUR LAFFER

<...>

Is it any wonder that the Great Depression was as long and deep as it was? Whoever heard of a country taxing itself into prosperity? Not only did taxes as a share of GDP fall, but GDP fell as well. It was a double whammy. Tax receipts from the top 1% of income earners stayed flat as a share of GDP, going to 1% in 1940 from 1.1% in 1928, but at what cost?

We all know that there are lots of factors influencing tax revenues from the rich, but the number one factor has to be the statutory tax rates government tells the rich they have to pay. Not only do the direct income tax consequences of higher tax rates on those in the highest brackets lead to higher deficits, the indirect effects magnify the tax revenue losses many fold.

As a result of higher tax rates on those people in the highest tax brackets, there will be less employment, output, sales, profits and capital gains—all leading to lower payrolls and lower total tax receipts. There will also be higher unemployment, poverty and lower incomes, all of which require more government spending. It's a Catch-22.

Higher tax rates on the rich create the very poverty and unemployment that is used to justify their presence. It is a vicious cycle that well-trained economists should know to avoid.

What a joke.

[NC_Nurse]

1. Bullshit. Their stock and trade.

[arbusto_baboso]

2. So where are the jobs from the Bush tax cuts? Oh, that's right....

they're in China and India.

Lying mother fucker.

[golfguru]

9. China has no tax on capital gains!

As far as I know.

Russia and many of it's former satellite countries have adopted
flat tax.

[arbusto_baboso]

10. And they allow employer's to pay virtual slave-wages.

Let's keep the focus on where it really needs to be.

[golfguru]

20. You are forgetting one thing...China has more supply of labor

than any other country in the world. When labor supply outweighs
demand, wages tend to be diminished. The old law of supply & demand is working.

I have a friend in China who makes $50,000 per year and can afford to send her
son to an American University. She is an engineering graduate. SO not everyone
is making slave wages. Actually people with high skills are in high demand.

[Raine1967]

15. Awesome, So we should be like China and Russia

Are you joking?

I have heard this meme from a few conservatives as of late.

[Common Sense Party]

18. It'd be nice to get some economic growth like China

Even just a sliver of it.

Of course, their growth rate is not sustainable. But ours is non-existent at the moment.

[golfguru]

19. We are talking about formerly communist/socialist countries

who have now discarded their ways after many years of abysmal economic results.
China is creating more millionaires than any other country right now. Russia has
many Billionaires and and a growing economy. The 4 strogest growth economies now
are the BRICs (Brazil, Russia, India & China)

So it is amazing that these formerly extreme non-capitalist countries have now
discovered nascent capitalism. China economy has grown at double digit rates
for several years. These are not right wing talking points. These are facts.
They can easily be confirmed by using several search engines.

[tridim]

3. Why isn't the WSJ concerned that Laffer's theory has already been proven wrong?

A real newspaper would at least mention it.

[BootinUp]

4. suggest replacing well-trained economists

with well-indoctrinated, but its pretty close as it is.

[BootinUp]

5. His graph indirectly illuminates the tremendous rise in inequality

since the early 80's.

[tularetom]

6. How long is it supposed to take for trickle down to trickle down?

The tax cuts go back a long way and nothing has happened yet.

[ClassWarrior]

7. Yes, you give the rich tax breaks and they just go out and create jobs whether...

...they need to hire someone or not!!

:eyes:

NGU.

[Jennicut]

8. What none of these idiots can tell us is why are the rich corps not spending their money from these

tax breaks right now to create jobs? Hmmmm? No answer comes from them. It is obvious that trickle down trickles down only into their wallets and not to us.

[DrToast]

11. If the Bush tax cuts resulted in all these jobs, why is unemployment so high?

Why can't anyone ask one of these jerkoffs that question? Why as the Bush expansion one of the worst on record in terms of output and job creation?

[Alcibiades]

12. He's STILL making the same outragous claim!

Lower top marginal tax rates don't raise revenue. If you want proof, graph the top rate and the deficit. Cuts in taxes on the wealthy correlate nicely with the increase in the deficit.

I knew Laffer was a lightweight from the failure of his theory, now in practice for over 30 years: I had no idea he was outright stupid. His description of the Great Depression is mind-blowingly simplistic; he makes no mention of the role of WWI, the Fed, any other central bank, interest rates, asset bubbles, economic inequality, the business cycle, or any of the other theories that historians and economists have about the origins Great Depression. Instead, it's all down to the top marginal tax rate!

He's ignorant.

[Raine1967]

13. Has he taken a look at the unemployment rate right now?

We already have have less output, sales, profits and capital gains -- for ALL except the top 1%.

That is the niche he is speaking to.
The rich have proven they will not end poverty and unemployment. They had that chance, and they failed so miserably that it is crippling our nation. It's time to call these lovers of trickle down economics out.

They had a chance -- THEY FAILED because they don;t care about anyone but themselves.

[Ikonoklast]

14. Laffer is to Economics as Kangaroos are to Particle Physics.

No discernable relation whatsoever.

[Yavin4]

16. Laffer Is Not An Economist. He's A Paid Propagandist Posing As An Economist

But the media treats him as some sort of an unbiased serious academic which only serves the purpose of getting the American people to buy into the logic that our economy is totally controlled by a cabal of the uber wealthy, and that we must treat them like Gods.

[Jeff In Milwaukee]

17. It's as if the last 30 years never happened.....

I was watching a guy on Kudlow last week talking about how great the Reagan tax cuts were, and then Bill Clinton nearly destroyed the economy, but THANK GOD Bush puts things right.

These people have taken up permanent residence on Bizarro World.

[Kurt_and_Hunter]

21. He is correct in his way... though terribly wrong. The details matter.

If the tax-cuts-over-$250K are canceled and the money applied to the deficit there will indeed be "lower payrolls... There will also be higher unemployment, poverty and lower incomes, all of which require more government spending."

All of that would happen... to the tune of $11 Billion/year in 2011 and 2012. (The current stimulative effect of those tax-cuts)

I doubt anyone will notice the gain or loss of that $11 Billion in effect one way or another.

On the other hand, if the revenue from those canceled cuts ($35Billion/year 2011 and 2012) is put into something stimulative it will be about $50 Billion/year worth of GDP increase. And there will be higher payrolls and higher total tax receipts. There will also be lower unemployment, less poverty and higher incomes, all of which require less government spending.

The man is a worthless idiot and liar, but it is worth noting the exact nature of his lies.

And worth noting that if the Obama administration used the canceled tax-cut revenue to reduce the deficit they would be vindicating Arthur-fucking-Laffer.

Just one more reason to not use the money on the deficit.

[ProSense]

23. The problem is that this

"If the tax-cuts-over-$250K are canceled and the money applied to the deficit there will indeed be 'lower payrolls... There will also be higher unemployment, poverty and lower incomes, all of which require more government spending.'"

...has nothing to do with his argument.

He's simply arguing that such cuts result in these consequences simply by virtue of eliminating them. He doesn't care or mention anything about applying the funds to deficit reduction or stimulus spending.

[ProgressOnTheMove]

22. If they'd been taxed correctly back then there wouldn't of been wild speculation with the excess

wealth.

[yellowcanine]

24. There is a reason supply side economics is known as the "laugher curve"