It really shouldn’t be so hard

Here’s the strategy:

Arthur Laffer has a simple theory of politics. It’s about as simple as his theory of economics. . . . The economic theory says that the lowest, simplest tax code will produce the most growth. The political theory goes like this: Politicians crave love from voters. So if you want to get a politician to do what you think is right, give him a plan he can easily sell, and make sure that plan will deliver a lot of crowd-pleasing economic growth.

George Bush Snr sat in the Reagan White House for eight years and didn’t learn a thing. Nor did the voters who elected Obama. Even here, we had a government that brought us lower taxes and ongoing prosperity, so we rewarded them by bringing in the other side. There is, of course, more to the theory than we see at the final upper stage. And it is even possible he is right about what might happen in the US next, assuming someone can be induced to actually take those crucial first steps.

His economic calculations have led him to believe that the U.S. economy is primed, after a decade of slow growth and middle-class income stagnation, to grow rapidly – it just needs a big tax reform bill that would lower rates and eliminate most deductions. . . .

This is Laffer’s unshakeable belief: that once voters elect a supply-side acolyte to the White House, massive growth will follow. That growth will please voters. Voters will reward the president’s party. And Republicans, he predicts, will go on to enjoy a generation-long lock on Washington – until, he says, voters forget the power of supply-side economics, and the cycle begins again.

Here, alas, we are still trying to unwind from the old cycle never mind starting a new one.

MORE ALONG THE SAME LINES BUT FROM AUSTRALIA: Peter Costello’s taxing truths. Here is what you need to know but do read the rest:

The government has been hurt by the former treasurer’s claim that it is leaning too heavily on tax increases and not enough on spending cuts to repair the budget.

Raising taxes is bad economics and will repel votes. Other than that, it’s a great idea.

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14 Responses to It really shouldn’t be so hard

  1. Robert Crew says:

    It’s interesting that the article highlights that a lower, simpler, tax system has been Republican policy (ish) for 40 years. Before that, Republicans supported high tax rates because they didn’t bring in revenue – Democrats such as JFK and LBJ supported tax cuts because they knew that would increase the revenue available for social programs. In many ways, the high tax rates of the post-war years actually helped to “starve the beast”, as there were numerous exemptions, e.g. for property investment. As we know, the rich can always choose between earning income, and realising capital gains or rents.

  2. ar says:

    Leftists have a more effective political theory – make half the voters dependent on government.

  3. Driftforge says:

    that a lower, simpler, tax system has been Republican policy (ish) for 40 years

    Smacks of an issue that is a brand but not reflected in actions. Don’t resolve the issue, we win votes on it.

  4. AP says:

    Angus, are you reading this?

  5. Ray says:

    I think you have quoted Arthur Laffer quite accurately. Anyway, we are so rich in Australia, we just give it away (to ourselves). When does the party end? We ended up with all our wool in woolsheds when the rest of the world moved to less expensive “fibres”; the world was desperate for our iron ore at $150 now they won’t pay $60; our children can’t afford a house because they don’t have one million dollars. The world owes us a living – now pay up!

  6. Kurt says:

    I think you meant George Bush Jnr didn’t you? George H. Bush served two terms as VP and one as President.

  7. Bruce of Newcastle says:

    Unfortunately the Democrats have inflicted severe atherosclerosis of the economic arteries to the US, especially in the last 6 years. That cannot be unwound. You now need a zillion forms filled to do any sort of business.

    Then there is Obamacare, which has absolutely wasted middle income taxpayers and small business. Obamacare is not going to be easily unwound either.

    I have had plenty of experience in industry of the same principle. A fresh new office is established, and off you go building things and doing things and achieving. Then as time goes by new procedures come in: mandatory manual handling training, take 5 safety, job safety assessments, area inductions, UN human rights code training (yes, really). After a while you are spending half your time bored out of your skull filling forms and attending training courses run by maniacs.

    About that point 5 or 6 years after the office was established, the people in HQ notice that costs have risen and efficiency has fallen (despite them usually being the ones who impose the red and green tape). So they have a night of the long knives. I’ve been through redundancy rounds in several companies – with between 20% and 90% of people losing their jobs. Usually what happens is that with the lost people the remaining local management ditches all the red tape that accumulated in those 5 or 6 years. Suddenly the office is competitive again, and away it all goes onto the next cycle.

    This cyclic purging never happens in economies without war or revolution. It never happens to the Public Service or the body of law. So it just builds up and builds up.

    That is why a few tax reductions and some supply side economics will not help much. There is too much crap built up. Obamacare has changed the nature of health provision and that won’t be removed even if the law is repealed. The USEPA will still be there (the GOP sometimes say they will abolish it, but that won’t happen). DOE will still be full of green weenies who want to build wind turbines and the DOA full of biofuels bods who want more dosh to burn food in car petrol tanks.

    And we are just the same. The whole West is the same. Drowned in crap to the point that it is easier not to risk starting a business and being submerged in bureaucratic excrement.

  8. john constantine says:

    The maniac swampies all feel they deserve to be the ones that run classes instructing people in how the seating on the lifeboats of the Titanic should be fairly and equally and sustainably allocated.

    Once everybody is accredited through compulsory training, they must pay for and endure annual refresher courses to keep them thinking the right way about how lifeboat seats should be allocated.

    It took a non-swampie to give iceberg spotting and avoiding gear to cruiseships.

  9. john constantine says:

    It took the swampfilth to decide that everybody needed equal and fair and sustainable internet at their house and to steal an open ended pile of tens of billions to do it to the proles desktops through a public service swampy power and revenue dinosaur.

    It took non-swampies to figure out that ‘the people’ wanted mobile internet.

  10. john constantine says:

    It took swampies to decide that the people needed fair and equal and sustainable ‘green electricity’ and use filthlaws to force it on them.

    What ‘conversation’ will it take to ‘reveal’ that the people want cheap and reliable energy, and jobs for their kids?.

    Taxing the people into socialism and total reliance on the good and great overlords of the socialist kleptocrat aristocracy–when can we get the beheading of this entire mentality underway?.

  11. dianeh says:

    What ‘conversation’ will it take to ‘reveal’ that the people want cheap and reliable energy, and jobs for their kids?.

    When I speak to some of my ‘greener’ friends, they don’t make a connection between the price of electricity that they complain about, and the RET/Carbon tax/govt policy, nor do they see the increasing price of energy as an economy killer, putting their children’s future at risk, as well as their own jobs.

  12. rich says:

    Taxing the people into socialism and total reliance on the good and great overlords of the socialist kleptocrat aristocracy–when can we get the beheading of this entire mentality underway?.

    They won’t behead it if the aristocracy offers the masses “bread and circuses”
    a cynical man once said to me, “if you want to enslave someone, first outsource their independence”

    Working hard is hard. Better that the overlords throw breadcrumbs stolen from other people

  13. Roger says:

    I trust you enlighten them, dianeh.

  14. Gavin R Putland says:

    I remind readers that the “Laffer curve” was anticipated by Frank Ramsey in 1927: http://t.co/D2K7HZ5Rr6 .

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