This is relatively short Weekly Update because it’s the July 4th weekend and I want everybody to have a nice restful weekend
This is relatively short Weekly Update because it’s the July 4th weekend and I want everybody to have a nice restful weekend and day off on Monday. There are a lot of difficult issues facing the country. I don’t want to focus on that, I want you to take some time off from those issues and enjoy the weekend with friends, family, or alone if that’s your choice.
Profile in Courage – Dr. Arthur “Art” Laffer
Since the dawn of the discipline of economics, the field’s practitioners have been stuck in an identity crisis. Many economists have hidden behind an overly mathematicised view of supply and demand, trying to pigeonhole a complicated economic order into a series of narrow equations. Some academics have even tried to address recessions by “calculating” the exact amount of money that must be injected into the economy by central planners. Fortunately, a few bold economists have elevated the dialogue by focusing on the big picture and the very real incentives that motivate and govern individuals and institutions. Enter Dr. Art Laffer, one of these bold thinkers. Dr. Laffer has received considerable acclaim (and backlash) for his view that higher taxation may in fact lead to less revenue. While reasonable people can and do argue about the “right” rate of taxation that keeps the economy and tax revenue chugging along, there’s little doubt that Laffer’s big idea won the day and changed the way
the world looks at tax policy and growth. Laffer continues to forge ahead with his bold ideas, arguing even in the current populist moment that onerous antitrust enforcement is bad for consumers and the economy. And, for helping pivot the “dismal science” of economics back to pro-prosperity policies, Art Laffer is truly a Profile in Courage.
Laffer suspected that then-President Ford’s gambit to raise taxes to curb inflation would not work, and reportedly sketched out his famous “Laffer Curve” on a napkin during a 1974 dinner meeting with top Ford administration officials. The illustration was simple and showed that high tax rates can actually result in lower revenue… up to a point. In other words, there is a “Goldilocks” tax rate (not too high nor too low) at which maximum revenues can be collected. The key is that too-high tax rates can discourage productive activity, with fewer people going out into the economy seeking to innovate and earn a living ultimately leading to less taxable income and, ultimately, less revenue. While Laffer’s bold ideas failed to catch on right away, a rising political star by the name of Ronald Reagan took Laffer’s theories to heart and incorporated them into his policy proposals. Less than fifteen years after the ink had dried on Laffer’s napkin, President Reagan had successfully lowered top tax
rates to 28 percent and the economy charged forward in a record-long peacetime expansion. And, even as Reagan and his legislative allies repeatedly lowered tax rates (taking effect starting in 1982) income tax collections as a share of the economy held stable at around 8 percent – around the same share achieved by the far higher tax rates of the 1970s. Sure, tax rates were far lower under Reagan, but rapidly rising incomes meant a surge in total taxable income across the economy. Reagan unfortunately signed massive budgets into law, ensuring that red ink would continue to wreak havoc on federal finances. Yet, Laffer’s basic intuition was proven right that high spending – not low taxes – is the fundamental driver of deficits and inflation.
Laffer’s big picture extends far beyond tax rates and revenue collection. In a recent paper co-authored with Laffer Associates analyst John Barrington Burke, Laffer argued that recent antitrust proposals, “will injure the digital economy and prevent industry leaders from doing what the digital economy does best: Driving down prices and providing new generations of technology-based products that expand the productivity of the American economy and provide consumers with new generations of exciting and popular new products.” Just as in the 1970s, Laffer is not afraid to call out kneejerk advocacy for central planning and flawed federal “solutions.” And, for continuing to call for pro-growth reforms even when it isn’t popular nor convenient to do so, Art Laffer is a Profile in Courage.
BLOGS:
** Monday: TPA Sends Letter to FCC on Accelerating Wireline Broadband Deployment ([link removed])
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** Tuesday: The Road to Quitting Smoking Is Paved With Candy ([link removed])
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** Wednesday: The FDA’s demonization of nicotine harms consumers and people who want to quit smoking ([link removed])
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** Thursday: TPA Responds to Supreme Court Ruling in West Virginia v. EPA ([link removed])
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Friday: Profile in Courage: Dr. Arthur “Art” Laffer ([link removed])
MEDIA:
June 27, 2022: WBFF Fox45 ([link removed]) (Baltimore, Md.) interviewed me about a failed VA software program.
June 28, 2022: Inside Sources ran TPA’s op-ed, “The Road to Quitting Smoking Is Paved With Candy ([link removed]) .”
June 28, 2022: Patrick Hedger joined ‘The Doug Wagner Show’ ([link removed]) on Newsradio 600WMT and NewsTalk 1420WOC to discuss consumer sentiment reaching an all time low.
June 29, 2022: Dan Savickas joined The Barrett Brief (New Orleans, LA) to discuss news of the day.
June 29, 2022: WBFF Fox45 (Baltimore, Md.) quoted TPA in their story, “Delayed video uploads and broken CitiWatch cameras: Audit outlines BPD surveillance woes ([link removed]) .”
June 29, 2022: The Center Square ([link removed]) ran TPA’s op-ed, “The FDA’s demonization of nicotine harms consumers and people who want to quit smoking.”
June 29, 2022: WBFF Fox45 (Baltimore, Md.) quoted TPA in their story, “City to spend twice as much for Nick Mosby to attend same conference as his colleagues ([link removed]) .”
June 29, 2022: The Telegraph (Nashua, NH) ran TPA’s op-ed titled, “The road to quitting smoking is paved with candy.” ([link removed])
June 29, 2022: The Lowell Sun ran TPA’s op-ed titled, “The road to quitting smoking is paved with candy ([link removed]) .”
June 30, 2022: WBFF Fox45 (Baltimore, Md.) interviewed me about gas taxes and President Biden’s plan for a gas rebate card.
June 30, 2022: I appeared on WBOB 600 AM ([link removed]) (Jacksonville, Fla.) to talk about the economy and the Supreme Court.
July 1, 2022: The Livingston Parish News (Denham Springs, La.) ran TPA’s op-ed, “OPINION | Celebrating businesses that have helped reduce the tobacco burden ([link removed]) .”
Have a great weekend!
Best,
David Williams
President
Taxpayers Protection Alliance
1101 14th Street, NW
Suite 1120
Washington, D.C. xxxxxx
www.protectingtaxpayers.org ([link removed])
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