Category Archives: Ronald Reagan

Dan Mitchell: Biden’s Nonsensical Class-Warfare Tweet

Biden’s Nonsensical Class-Warfare Tweet

Trump had some economically illiterate tweets about trade during his presidency, including the infamous one about being “Tariff Man.”

I think Joe Biden must be feeling envious that Trump got so much attention, so he has issued a tweetshowing that he also suffers from economic illiteracy.

Or maybe Biden’s problem is dishonesty because his tweet is based on a make-believe number about the the average tax rate paid by billionaires.

For what it’s worth, this isn’t the first time that Biden has issued a tweet based on fake numbers.

In the previous instance, he deliberately confused the distinction between the financial concept of book income and and cash-flow concept of taxable income.

What accounts for his most recent error?

Reporting for the Wall Street Journal, Richard Rubin and Rachel Louise Ensign explain how the Biden Administration concocted this number.

What do the wealthy pay in federal taxes? On paper, the top marginal income-tax rate is 37% on ordinary income and 23.8% on capital gains. Government estimates put high-income filers’ average rates in the mid-20s. A new Biden administration analysis, however, pegs the average tax rate for the 400 wealthiest households at 8.2% from 2010 to 2018. …It’s far below traditional estimates from government number crunchers… Recent estimates of a broader group of rich people from the Congressional Budget Office, Treasury Department and the Joint Committee on Taxation fall between 23% and 26%.

So how does the Biden Administration get a number that is radically different than other sources?

By artificially inflating the income of rich people by asserting that changes in wealth should count as income.

White House…economists Greg Leiserson and Danny Yagan..include increases in unrealized capital gains. That is the change in the value of assets, including stocks, that haven’t been sold. …Conventional analyses and the current income-tax law don’t include unrealized gains.

At the risk of making a wonky point, “conventional analysis” and “income-tax law” don’t include unrealized capital gains as income because, well, changes in net worth are not income.

And the fact that some folks on the left want to tax people on unrealized capital gains doesn’t change that reality.

To understand why that would be wretched policy, let’s cite examples that apply to those of us who, sadly, are not billionaires.

  • Imagine filing your taxes next year and having to pay more money to the IRS simply because Zillow estimated that your house rose in value.
  • Imagine that you’re filling out your 1040 form next year and you have to pay more money to the IRS  simply because your IRA or 401(k) rose in value.

Both of these examples sound absurd because they would be absurd. And if a policy is absurd and unfair for regular people, it’s also absurd and unfair for rich people.

Since I’m a fiscal wonk, I’ll close by making the point that the Biden Administration wants to take a bad tax(capital gains tax) and make it worse (by taxing paper gains in addition to actual gains).

The net result is that we would have a backdoor wealth tax – a approach that is so anti-growth that even most European governments have repealed those levies.

But since Joe Biden is motivated by class warfare (see here, here, here, and here), he apparently doesn’t care about the economic consequences.

P.S. Biden once claimed that it is “patriotic” to pay higher taxes, but he then played Benedict Arnoldwith his own tax return.

I enjoyed this article below because it demonstrates that the Laffer Curve has been working for almost 100 years now when it is put to the test in the USA. I actually got to hear Arthur Laffer speak in person in 1981 and he told us in advance what was going to happen the 1980’s and it all came about as he said it would when Ronald Reagan’s tax cuts took place. I wish we would lower taxes now instead of looking for more revenue through raised taxes. We have to grow the economy:

What Mitt Romney Said Last Night About Tax Cuts And The Deficit Was Absolutely Right. And What Obama Said Was Absolutely Wrong.

Mitt Romney repeatedly said last night that he would not allow tax cuts to add to the deficit.  He repeatedly said it because over and over again Obama blathered the liberal talking point that cutting taxes necessarily increased deficits.

Romney’s exact words: “I want to underline that — no tax cut that adds to the deficit.”

Meanwhile, Obama has promised to cut the deficit in half during his first four years – but instead gave America the highest deficits in the history of the entire human race.

I’ve written about this before.  Let’s replay what has happened every single time we’ve ever cut the income tax rate.

The fact of the matter is that we can go back to Calvin Coolidge who said very nearly THE EXACT SAME THING to his treasury secretary: he too would not allow any tax cuts that added to the debt.  Andrew Mellon – quite possibly the most brilliant economic mind of his day – did a great deal of research and determined what he believed was the best tax rate.  And the Coolidge administration DID cut income taxes and MASSIVELY increased revenues.  Coolidge and Mellon cut the income tax rate 67.12 percent (from 73 to 24 percent); and revenues not only did not go down, but they went UP by at least 42.86 percent (from $700 billion to over $1 billion).

That’s something called a documented fact.  But that wasn’t all that happened: another incredible thing was that the taxes and percentage of taxes paid actually went UP for the rich.  Because as they were allowed to keep more of the profits that they earned by investing in successful business, they significantly increased their investments and therefore paid more in taxes than they otherwise would have had they continued sheltering their money to protect themselves from the higher tax rates.  Liberals ignore reality, but it is simply true.  It is a fact.  It happened.

Then FDR came along and raised the tax rates again and the opposite happened: we collected less and less revenue while the burden of taxation fell increasingly on the poor and middle class again.  Which is exactly what Obama wants to do.

People don’t realize that John F. Kennedy, one of the greatest Democrat presidents, was a TAX CUTTER who believed the conservative economic philosophy that cutting tax rates would in fact increase tax revenues.  He too cut taxes, and he too increased tax revenues.

So we get to Ronald Reagan, who famously cut taxes.  And again, we find that Reagan cut that godawful liberal tax rate during an incredibly godawful liberal-caused economic recession, and he increased tax revenue by 20.71 percent (with revenues increasing from $956 billion to $1.154 trillion).  And again, the taxes were paid primarily by the rich:

“The share of the income tax burden borne by the top 10 percent of taxpayers increased from 48.0 percent in 1981 to 57.2 percent in 1988. Meanwhile, the share of income taxes paid by the bottom 50 percent of taxpayers dropped from 7.5 percent in 1981 to 5.7 percent in 1988.”

So we get to George Bush and the Bush tax cuts that liberals and in particular Obama have just demonized up one side and demagogued down the other.  And I can simply quote the New York Times AT the time:

Sharp Rise in Tax Revenue to Pare U.S. Deficit By EDMUND L. ANDREWS Published: July 13, 2005

WASHINGTON, July 12 – For the first time since President Bush took office, an unexpected leap in tax revenue is about to shrink the federal budget deficit this year, by nearly $100 billion.

A Jump in Corporate Payments On Wednesday, White House officials plan to announce that the deficit for the 2005 fiscal year, which ends in September, will be far smaller than the $427 billion they estimated in February.

Mr. Bush plans to hail the improvement at a cabinet meeting and to cite it as validation of his argument that tax cuts would stimulate the economy and ultimately help pay for themselves.

Based on revenue and spending data through June, the budget deficit for the first nine months of the fiscal year was $251 billion, $76 billion lower than the $327 billion gap recorded at the corresponding point a year earlier.

The Congressional Budget Office estimated last week that the deficit for the full fiscal year, which reached $412 billion in 2004, could be “significantly less than $350 billion, perhaps below $325 billion.”

The big surprise has been in tax revenue, which is running nearly 15 percent higher than in 2004. Corporate tax revenue has soared about 40 percent, after languishing for four years, and individual tax revenue is up as well
.

And of course the New York Times, as reliable liberals, use the adjective whenever something good happens under conservative policies and whenever something bad happens under liberal policies: ”unexpected.”   But it WASN’T ”unexpected.”  It was EXACTLY what Republicans had said would happen and in fact it was exactly what HAD IN FACT HAPPENED every single time we’ve EVER cut income tax rates.

The truth is that conservative tax policy has a perfect track record: every single time it has ever been tried, we have INCREASED tax revenues while not only exploding economic activity and creating more jobs, but encouraging the wealthy to pay more in taxes as well.  And liberals simply dishonestly refuse to acknowledge documented history.

Meanwhile, liberals also have a perfect record … of FAILUREThey keep raising taxes and keep not understanding why they don’t get the revenues they predicted.

The following is a section from my article, “Tax Cuts INCREASE Revenues; They Have ALWAYS Increased Revenues“, where I document every single thing I said above:

The Falsehood That Tax Cuts Increase The Deficit

Now let’s take a look at the utterly fallacious view that tax cuts in general create higher deficits.

Let’s take a trip back in time, starting with the 1920s.  From Burton Folsom’s book, New Deal or Raw Deal?:

In 1921, President Harding asked the sixty-five-year-old [Andrew] Mellon to be secretary of the treasury; the national debt [resulting from WWI] had surpassed $20 billion and unemployment had reached 11.7 percent, one of the highest rates in U.S. history.  Harding invited Mellon to tinker with tax rates to encourage investment without incurring more debt. Mellon studied the problem carefully; his solution was what is today called “supply side economics,” the idea of cutting taxes to stimulate investment.  High income tax rates, Mellon argued, “inevitably put pressure upon the taxpayer to withdraw this capital from productive business and invest it in tax-exempt securities. . . . The result is that the sources of taxation are drying up, wealth is failing to carry its share of the tax burden; and capital is being diverted into channels which yield neither revenue to the Government nor profit to the people” (page 128).

Mellon wrote, “It seems difficult for some to understand that high rates of taxation do not necessarily mean large revenue to the Government, and that more revenue may often be obtained by lower taxes.”  And he compared the government setting tax rates on incomes to a businessman setting prices on products: “If a price is fixed too high, sales drop off and with them profits.”

And what happened?

“As secretary of the treasury, Mellon promoted, and Harding and Coolidge backed, a plan that eventually cut taxes on large incomes from 73 to 24 percent and on smaller incomes from 4 to 1/2 of 1 percent.  These tax cuts helped produce an outpouring of economic development – from air conditioning to refrigerators to zippers, Scotch tape to radios and talking movies.  Investors took more risks when they were allowed to keep more of their gains.  President Coolidge, during his six years in office, averaged only 3.3 percent unemployment and 1 percent inflation – the lowest misery index of any president in the twentieth century.

Furthermore, Mellon was also vindicated in his astonishing predictions that cutting taxes across the board would generate more revenue.  In the early 1920s, when the highest tax rate was 73 percent, the total income tax revenue to the U.S. government was a little over $700 million.  In 1928 and 1929, when the top tax rate was slashed to 25 and 24 percent, the total revenue topped the $1 billion mark.  Also remarkable, as Table 3 indicates, is that the burden of paying these taxes fell increasingly upon the wealthy” (page 129-130).

Now, that is incredible upon its face, but it becomes even more incredible when contrasted with FDR’s antibusiness and confiscatory tax policies, which both dramatically shrunk in terms of actual income tax revenues (from $1.096 billion in 1929 to $527 million in 1935), and dramatically shifted the tax burden to the backs of the poor by imposing huge new excise taxes (from $540 million in 1929 to $1.364 billion in 1935).  See Table 1 on page 125 of New Deal or Raw Deal for that information.

FDR both collected far less taxes from the rich, while imposing a far more onerous tax burden upon the poor.

It is simply a matter of empirical fact that tax cuts create increased revenue, and that those [Democrats] who have refused to pay attention to that fact have ended up reducing government revenues even as they increased the burdens on the poorest whom they falsely claim to help.

Let’s move on to John F. Kennedy, one of the most popular Democrat presidents ever.  Few realize that he was also a supply-side tax cutter.

Kennedy said:

“It is a paradoxical truth that tax rates are too high and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now … Cutting taxes now is not to incur a budget deficit, but to achieve the more prosperous, expanding economy which can bring a budget surplus.”

– John F. Kennedy, Nov. 20, 1962, president’s news conference


“Lower rates of taxation will stimulate economic activity and so raise the levels of personal and corporate income as to yield within a few years an increased – not a reduced – flow of revenues to the federal government.”

– John F. Kennedy, Jan. 17, 1963, annual budget message to the Congress, fiscal year 1964

“In today’s economy, fiscal prudence and responsibility call for tax reduction even if it temporarily enlarges the federal deficit – why reducing taxes is the best way open to us to increase revenues.”

– John F. Kennedy, Jan. 21, 1963, annual message to the Congress: “The Economic Report Of The President”


“It is no contradiction – the most important single thing we can do to stimulate investment in today’s economy is to raise consumption by major reduction of individual income tax rates.”

– John F. Kennedy, Jan. 21, 1963, annual message to the Congress: “The Economic Report Of The President”


“Our tax system still siphons out of the private economy too large a share of personal and business purchasing power and reduces the incentive for risk, investment and effort – thereby aborting our recoveries and stifling our national growth rate.”

– John F. Kennedy, Jan. 24, 1963, message to Congress on tax reduction and reform, House Doc. 43, 88th Congress, 1st Session.


“A tax cut means higher family income and higher business profits and a balanced federal budget. Every taxpayer and his family will have more money left over after taxes for a new car, a new home, new conveniences, education and investment. Every businessman can keep a higher percentage of his profits in his cash register or put it to work expanding or improving his business, and as the national income grows, the federal government will ultimately end up with more revenues.”

– John F. Kennedy, Sept. 18, 1963, radio and television address to the nation on tax-reduction bill

Which is to say that modern Democrats are essentially calling one of their greatest presidents a liar when they demonize tax cuts as a means of increasing government revenues.

So let’s move on to Ronald Reagan.  Reagan had two major tax cutting policies implemented: the Economic Recovery Tax Act (ERTA) of 1981, which was retroactive to 1981, and the Tax Reform Act of 1986.

Did Reagan’s tax cuts decrease federal revenues?  Hardly:

We find that 8 of the following 10 years there was a surplus of revenue from 1980, prior to the Reagan tax cuts.  And, following the Tax Reform Act of 1986, there was a MASSIVE INCREASEof revenue.

So Reagan’s tax cuts increased revenue.  But who paid the increased tax revenue?  The poor?  Opponents of the Reagan tax cuts argued that his policy was a giveaway to the rich (ever heard that one before?) because their tax payments would fall.  But that was exactly wrong.  In reality:

“The share of the income tax burden borne by the top 10 percent of taxpayers increased from 48.0 percent in 1981 to 57.2 percent in 1988. Meanwhile, the share of income taxes paid by the bottom 50 percent of taxpayers dropped from 7.5 percent in 1981 to 5.7 percent in 1988.”

So Ronald Reagan a) collected more total revenue, b) collected more revenue from the rich, while c) reducing revenue collected by the bottom half of taxpayers, and d) generated an economic powerhouse that lasted – with only minor hiccups – for nearly three decades.  Pretty good achievement considering that his predecessor was forced to describe his own economy as a “malaise,” suffering due to a “crisis of confidence.” Pretty good considering that President Jimmy Carter responded to a reporter’s question as to what he would do about the problem of inflation by answering, “It would be misleading for me to tell any of you that there is a solution to it.”

Reagan whipped inflation.  Just as he whipped that malaise and that crisis of confidence.

________

The Laffer Curve, Part III: Dynamic Scoring

Dan Mitchell: Reagan was the runaway champion, but it’s worth noting that the burden of domestic spending also declined during the Clinton years.

In Defense of Bill Clinton

More than 10 years ago, I narrated this videoshowing how the United States benefited from spending restraint under both Ronald Reagan and Bill Clinton. Since today’s topic is Clinton’s policies, pay attention starting about 4:00.

If you don’t have time to watch the video, I hope you will at least pay attention to this chart, which appeared near the end (about 6:00).

It shows what happened to domestic spending (entitlements plus discretionary) as a share of economic outputduring the Reagan years, the Clinton years, and the 2001-2010 period under Bush and Obama.

Reagan was the runaway champion, but it’s worth noting that the burden of domestic spending also declined during the Clinton years.

But it wasn’t just that Bill Clinton was good on spending. Good things happened in the 1990s in other areas as well, especially trade.

In a column for the Wall Street Journal, Bill Galston defends Clinton’s “neoliberal” record.

… critics often mark the Clinton administration as the moment when establishment Democrats capitulated to the ideology of the unfettered market. Poor and working-class Americans paid the price, they charge… The historical record tells a different story. …During eight years of the Clinton administration, annual real growth in gross domestic product averaged a robust 3.8% while inflation was restrained, averaging 2.6%.Payrolls increased by 22.9 million… Unemployment fell from 7.3% in January 1993 to…4.2% at the end of President Clinton’s second term. Adjusted for inflation, real median household income rose by 13.9%. …During the administration, federal spending as a share of GDP fell from 21.2% to 17.5%… What about the poor? The poverty rate declined during the Clinton administration by nearly one quarter, from 15.1% to 11.3%, near its historic low. And it declined even faster among minorities—by 8.1 percentage points for Hispanics and 10.9 points for blacks. …In sum, during the heyday of neoliberalism, Americans weren’t forced to choose between high growth and low inflation or between aggregate growth and fairness for the poor, working class and minorities.

Why did we get these good results?

Because overall economic freedom increased during the Clinton years. And when the burden of government is reduced,that creates more opportunity for upward advancement for everyone in society.

By the way, I’m not arguing in today’s column that Bill Clinton deserves all the credit. There’s little doubt that the Republican landslide in 1994 played a big role in many of the subsequent pro-market reforms (such as welfare reform, the 1997 tax cut, etc).

But I will say that Bill Clinton at least was amenable to pro-market compromises, which is not what we saw during the Obama years (and I doubt we will see a shift to the center from Biden if Republicans win Congress this November).

P.S. Republicans were able to impose some fiscal discipline on Obama after the Tea Party landslide of 2010

P.P.S. For those who want more details, click here for a detailed examination of the fiscal policy performance of various modern presidents.

Below is a discussion from Milton Friedman on Bill Clinton and Ronald Reagan.

February 10, 1999 | Recorded on February 10, 1999

PRESIDENTIAL REPORT CARD: Milton Friedman on the State of the Union

with guest Milton Friedman
Former Hoover fellow and Nobel laureate Milton Friedman.

Milton Friedman, Senior Research Fellow, Hoover Institution and Nobel Laureate in Economic Sciences grades the achievements of the Clinton administration and evaluates the programs the President proposed in his 1999 State of the Union address.

Milton Friedman vs Bill Clinton (1999)

Published on May 28, 2012 by

ROBINSON Just the last eight years, or would you give high marks to Volcker as well, Greenspan’s predecessor?

FRIEDMAN That’s an interesting case, because you have to give the credit there really to Reagan. There’s no other President who would have stood by while the Fed followed the policy it did. If you remember— you don’t remember that period but if you go back…

ROBINSON I do actually, I had just started at the White House in those days…

FRIEDMAN …if you go back to that period, stopping the inflation that was raging which reached double-digit levels at the end of the ’70s and early ’80s required stepping on the brakes hard and produced a recession. And if you remember, Reagan’s popular ranking went way down in…

ROBINSON Down into the thirties.

FRIEDMAN …thirties, right. No other President would have stood by and said to the Fed, keep doing what you’re doing, you’re doing the right thing. But Reagan did do that. And that’s what enabled Volcker to do what Volcker did.

ROBINSON Back to the present to find out what Milton Friedman thinks of President Clinton’s legislative goals for the rest of his term.

THE SUNSHINE PLOYS

ROBINSON Let me ask you to apply your thinking to the principle points of Bill Clinton’s program for the remaining couple of years in office. The President’s program is intended— we’ll take old folks first— to, I quote now, “Address the challenge of a senior boom by using the budget surplus to help save Social Security.”

FRIEDMAN Well, the proposal, if you look at it in detail, is a complete fake.

ROBINSON A complete fake?

FRIEDMAN Absolutely.

ROBINSON He wants to take sixty percent— a little more than sixty percent of budget surplus over the next fifteen years…

FRIEDMAN Where does that come from? He’s counting that twice. That comes from the proceeds of the payroll taxes that are now in, which, in principle, though not in practice, are supposed to be used for Social Security, but which have indeed been financing every regular event. If he doesn’t do a thing about the surplus, that would still end up in bonds in the hands of the Social Security so-called Trust Fund.

ROBINSON You say he’s guilty of a little bit of a flim-flam game with the books.

FRIEDMAN Absolutely.

ROBINSON Within forty-eight hours of that State of the Union Address in which he made this proposal, Alan Greenspan, whom you have just praised, endorsed the proposal— in general terms, not specific terms, but he endorsed the proposal— and the Republicans in Congress said yep, that’s a good idea, sign us up for that too. How is it that he’s able to get everybody to go for what you call a flim-flam game?

FRIEDMAN Look, do you need to ask that question now after six years of Clinton? How he’s been able to get one flim-flam game after another. How he’s been able to bamboozle the people into thinking that he deserves higher ratings because he lies. Clinton is a superb politician who has a most extraordinary capacity to exude sincerity. He’s an incredible phenomenon. I think he’s a genius. But go back to the Social Security program. The first thing to be said is that all this nonsense about saving something for Social Security is pure fiction. It’s wrong to think that what people are paying into Social Security, what people are paying in the form of wage taxes, is what they’re paying for their own security. [

ROBINSON That’s nonsense.] There is no relationship whatsoever. We have a system under which you have a set of taxes for Social Security— named for Social Security, but it doesn’t matter, they’re payroll taxes, terrible taxes, regressive taxes. Nobody… you could not get a legislature to vote such a tax on its own. Can you imagine proposing a tax that would impose — let’s say sixteen percent tax— on all wages from the first dollar up to the maximum and nothing beyond that. Can you imagine voting that? Similarly, the other side of the picture is that we have made a series of commitments to people like me— I receive Social Security payments…

ROBINSON Oh so, it’s my payroll tax that goes to…

FRIEDMAN Absolutely. Absolutely. It’s not only your payroll tax, it’s your income tax, it’s whatever taxes you pay. I get them. And if you think you’re going to get ’em, you’re kidding yourself.

ROBINSON It is a fundamental deceit hoisted upon the American people and sustained for lo these six decades.

FRIEDMAN Absolutely. If you read the Social Security brochures, they say this is a system under which you are putting aside money now for your retirement.

ROBINSON And that’s nonsense.

FRIEDMAN That is utterly fake. But let’s suppose it were true…

ROBINSON All-right.

FRIEDMAN …for a moment. Why is it that it’s appropriate for government to come and tell me what fraction of my income I should save for my old age? If that’s okay, why can’t it come in and tell me exactly what fraction of my income I have to spend for food, what fraction for housing, what fraction for clothing. Let me show you the absurdity of this.

ROBINSON All-right.

FRIEDMAN Consider a young man of thirty-five who has AIDS for whom the expected length of life is ten years at the most maybe. Maybe there’ll be a cure. But his expected length of life is not very long. Is it really intelligent for him to put aside fifteen percent of his income for retirement at age sixty-five?

ROBINSON It’s outrageous.

FRIEDMAN It’s outrageous.

ROBINSON Outrageous.

FRIEDMAN Exactly. The only word you can give to it. And in my opinion, the whole Social Security system is an outrage.

ROBINSON If Social Security is ‘an outrage,’ what would Milton Friedman do about it? A Bonding Experience

ROBINSON How would you get rid of it?

FRIEDMAN Very simply. Here I am, I’m entire to a certain number of payments in the future. Have the government give me a bond equal to the current present value of— expected value of what I’m entitled to. You have already accumulated some rights. And so have the government give you a bond which will be due when you’re sixty-five which will be the present value of what you’ve already accumulated under the law. And then close the whole thing up.

ROBINSON And just close the books.

FRIEDMAN Everybody gets what he’s entitled to— what he’s been promised. The unfunded debt under Social Security is funded, it’s made open and above-board. There’s not a penny of transition cost, and everybody is… In my world, the payroll tax would be abolished, would be eliminated. It’s the worst tax we have on the books. And everybody would be free to do what he wanted about his own retirement.

ROBINSON Okay.

FRIEDMAN And on the whole he would do very well. Now undoubtedly, people who argue against that say, well what are you going to do about these people who are so careless and so unprudent that they don’t accumulate anything for retirement. That’s a general problem. What do you do about people who are poor, whether for their own fault or not for their own fault? You and I and society in general is not willing to see ’em starve to death.

ROBINSON Correct.

FRIEDMAN Well, I have always been in favor of having a program under which (a negative income tax) under which you will have some income minimum you will provide for people whether they are indigent because they’re wastrels or whether they’re indigent because they’re in bad health…

ROBINSON Even if it’s their own fault, they don’t starve.

FRIEDMAN The problem is, it’s always seemed to me absurd that you make a hundred percent of the people do something in order to make sure that one or two percent of the people don’t behave badly.

ROBINSON Milton, that negative income tax proposal actually started to go someplace, if I remember my history correctly, that actually started to go someplace during the Nixon years, didn’t it? Didn’t Cap Weinberger…

FRIEDMAN Yes, it did… No, Moynihan, Pat Moynihan…

ROBINSON Moynihan. And what happened to it? Why did it die?

FRIEDMAN Because the public pressure was converted into a program that I testified against. It’s what happens in Washington all the time.

ROBINSON Right, right, okay.

ROBINSON Next question. What would Milton Friedman do with the mounting budget surplus?

SAVING PRIVATE EARNING

ROBINSON We’ve got seventy-nine, eighty billion dollars more coming in this year than the government…

FRIEDMAN I am in favor of reducing taxes under any circumstances, for any excuse, with any reason whatsoever because that’s the only way you’re ever going to get effective control over government spending. Sooner or later [

ROBINSON Choke off the supply.] if you don’t reduce taxes to get rid of that surplus, it’s going to be spent. The rule from not only the last few years, hundreds of years, is that governments will spend whatever the tax system will raise plus as much more as they can get away with.

ROBINSON The Republicans are calling for a ten percent…

FRIEDMAN It’s not enough.

ROBINSON …cut. Not enough. What is… Now Dan Quayle, who’s running for President— this is the most extreme- extreme may be the wrong word but this is the most dramatic proposal I’m aware of that’s on the table anywhere at the moment— he’s called for a thirty percent cut. Is that enough?

FRIEDMAN I don’t know. I would cut it as much as you can get away with.

ROBINSON So you’d run the numbers and give back virtually all the surplus.

FRIEDMAN What do you mean give back? Not take.

ROBINSON Excuse me. It’s not take. You’d lower taxes…

FRIEDMAN You know, this idea of giving back, which is a word you use, assumes…

ROBINSON I take back my words, but go ahead and ram them down my throat.

FRIEDMAN …it assumes that every individual is a property of the government and that all of the income that you earn is really the government’s, and it decides how much you can keep and how much it gets. I’ve always said, it treats people as if they were running around with an IBM card on their back which says ‘do not mutilate, punch, or disturb.’

ROBINSON Right. You’ve got more money coming in at the moment than is going out.

FRIEDMAN You ought to reduce taxes by enough to generate…

ROBINSON You don’t want to pay down the debt.

FRIEDMAN Oh no. No, I want to generate a deficit because I want pressure on to get the government to spend less.

ROBINSON You like a federal deficit.

FRIEDMAN No, I don’t like a federal deficit, but I like lower government spending.

ROBINSON All-right. President Clinton has another proposal for using that surplus, and he calls them USA accounts. He’s proposing to use about eleven percent of the surplus over the next fifteen years or so to establish, I quote now from his speech, “universal savings accounts, USA accounts, to give all Americans the means to save,” again quotation here, “with extra help for the least able to save.” Details to follow. You like that idea?

FRIEDMAN No, I think it’s a terrible idea. You know, the idea is saying, I’m going to take your money, but then I’ll give it back to you if you do with it what I tell you to do. Is that a way you have a free society of free, self-reliant individuals who are responsible for themselves? It’s a terrible…

ROBINSON Do you even agree with the premise that the savings rate is too low in this country?

FRIEDMAN I don’t agree with that premise. What is the right savings rate?

ROBINSON Well, gee, you’re the Nobel Prize winner, I thought you’d be able to clue me in.

FRIEDMAN The right savings rate… In a world in which you did not have distortions, in which you did not have government stepping in and distorting the rate at which people save or not, the right saving rate is whatever all the people of the community simply want to save. How much you want to save, how much I want to save. Why shouldn’t people be free to save what they want?

ROBINSON Let’s move to a more theoretical question. Why do we end up with so many stupid government programs when we’re supposed to be so smart in our own private affairs?

THINK LOCALLY, ACT GLOBALLY

ROBINSON How is it, you credit great intelligence, shrewdness, on the part of individuals when they’re spending their own money and managing their own property in the marketplace, how can we all be so dumb when we give up being players in the marketplace and become citizens participating in the political process? We get hoodwinked by Clinton, we go for this crazy sham of Social Security, how can we be so dumb?

FRIEDMAN Because it’s always so attractive to be able to do good at somebody else’s expense. That the real problem of our government. Government is a way by which every individual believes he can live at the expense of everybody else. That’s— I’m just repeating what Bastiat said two centuries ago, more than two centuries ago. You know, the thing that people don’t really understand is that free societies of the kind we’ve been lucky enough to experience for the last hundred-hundred and fifty years are a very rare exception in human history. Most people, most of history, and at any one time, most people at any one time, have lived in tyranny and misery. And it’s only for a brief period, and why? It is precisely because once you get some government program in— may have been a very good idea, it’s always proposed for good reasons— once it gets in, it becomes a special privilege of a small group which has an enormously strong interest to maintain it, and you do not have any comparable group that has the interest to get rid of it. And therefore, the hardest thing in the world is to get rid of any government program, however badly it works. In fact, try to name any government programs that have been eliminated.

ROBINSON The draft. Well, that’s not a…

FRIEDMAN Yes, the draft is an example, it’s one of the rare examples of a program that has been eliminated. One of the others was Postal Savings. It used to be that the postal system had a savings system which became very popular as a result of the Great Depression. But it disappeared. Why? Because by accident when they set it up, they limited the interest they could pay on postal savings to two percent, and when the market rate got higher than that, all the money was taken out of postal savings and postal savings came to an end. But aside from that, can you name programs that have been eliminated because they failed? And so how will we set a limit on government, and keep it coming back, and the only thing I can see on the horizon that offers a real chance are term-limits.

ROBINSON Term limits?

FRIEDMAN Right now, being a politician is a lifetime career. Being a Congressman is a lifetime career.

ROBINSON Do we have any evidence in the states where term-limits apply that it has worked as you would like to see it work? Term-limits have been in effect here in California for about a decade now… They may have been enacted a decade ago, so they’ve been in effect for perhaps six years…

FRIEDMAN It’s a little early. We don’t really have any very good… However, it so happened, I had occasion to have a conversation the other day with a former Governor of Virginia: Allen, George Allen.

ROBINSON Who, everybody says he’s going to be running for the Senate. Against Chuck Robb.

FRIEDMAN Yes, that’s what he intends to do.

ROBINSON He intends to do. All-right.

FRIEDMAN However, he had, Virginia has a one-term four-year term for the Governor. And he said, you know, he said, if we had had a two-year term, if we had had the situation in most states, that you can run for a second term, I would have spent the third and fourth year of my term working for re-election. I would never have been able to get done what I got done. It was the first real hands-on testimonial I’ve seen to a term-limit. It’s not a good idea for being a legislator to be a lifetime profession. The founders of our country had the idea of legislation as a part-time activity. It is in many states today. But at the federal government level, it’s a full-time profession. And that is very unhealthy because the legislature— it’s not a criticism of the individual— but any human being in that position, he’s going to sit in committee meetings, and day after day he’s going to hear arguments, good arguments, worthy arguments for new programs. He’s going to get very few arguments for getting rid of programs. And the evidence is clear: the longer people are in Congress, the more willing they are to vote government spending.

ROBINSON The polls all show the American people are very concerned about our public schools. What does Milton Friedman think of President Clinton’s proposals to improve those public schools? Hire Learning

ROBINSON President Clinton on public schools. According to the White House fact sheet, he wants to, I quote, “raise standards and increase accountability in public schools (I’ve got to take a deep breath to get through this) through proposals to end social promotion, bring high-quality teachers into the classroom, intervene in failing schools, provide school report cards to parents, strengthen our commitment to smaller class-sizes, and boost our efforts for school modernization.” What grade do you give that proposal?

FRIEDMAN F.

ROBINSON F.

FRIEDMAN What does it mean? It means more government control of schools. What do we really need in schools? We need competition. What we have is a monopoly, and like every monopoly, it’s producing a low-quality product at a very high cost. The way to improve that is to have competition, to make it possible for parents to have a choice of the schools their children attend. All high-income people have that choice now. They can choose their residence for a place with good schools, or they can send their children to private schools, pay twice for schooling: once in taxes and once in tuition. But the lower income classes can’t.

ROBINSON They’re stuck. Milton, didn’t public schools used to work?

FRIEDMAN Yes. When I graduated from high-school in 1928, there were 150,000 school districts in this country. Today, there are 15,000 and the population is twice as great. In the early day, you had local control of schools, and there was effective competition between a large number of local areas. But school districts got consolidated. They got run not by local people but by the professional educators. And most important of all, in the 1960s you began to have the emergence of teachers’ unions taking control of the schools. And since 1960, since the teachers’ unions started emerging, you have had on the whole a rather steady decline in the quality of schooling. If you want to improve automobiles, do you have government step in and tell people what brakes to put on, and so on, or do you rely on the fact that General Motors is going to try to beat Ford, is going to try to beat Toyota? Competition is the most effective way to improve quality, whether in computers, in automobiles, in suits, or in schooling.

ROBINSON Let me ask you to close, if I may, with a prediction. It’s 2009, ten years from today. Is the government of the United States bigger, or smaller?

FRIEDMAN Smaller.

ROBINSON Your ideas are winning?

FRIEDMAN No. The Internet is going to make it harder and harder to collect taxes.

ROBINSON How come?

FRIEDMAN Because you’ll be able to evade taxes, you’ll be able to do your deals in the Cayman Islands.

ROBINSON So the Internet…

FRIEDMAN At the moment I see the Internet as the most likely source of the smaller government.

ROBINSON But in your mind it really will have an effect. That’s not speculative…

FRIEDMAN No, no, no. I believe it will and I believe it’s having it now.

ROBINSON I see. Okay. Milton Friedman— Bill Clinton I hope you’re taking notes, we’ll send a tape of this to the White House— Milton Friedman, thank you very much.

FRIEDMAN That’s all-right. I assure you they won’t look at it. Thank you.

ROBINSON Doctor Friedman believes the government should be smaller and that it will become so. Maybe some future President will preside over such a small government that he can shrink up the State of the Union Address enough to get rid of the Teleprompter and deliver the speech from memory. I’m Peter Robinson. Thanks for joining us.

French president, others mourn Brent Renaud, Arkansas filmmaker killed in Ukraine 

https://i0.wp.com/www.reagan.utexas.edu/archives/photographs/large/C39192-3.jpg

French president, others mourn Brent Renaud, Arkansas filmmaker killed in Ukraine

by Bill Bowden | Today at 7:20 p.m.

Brent Renaud attends the 74th annual Peabody Awards at Cipriani Wall Street in New York in this May 31, 2015, file photo. Renaud, a Little Rock filmmaker and journalist, was killed in a suburb of Kyiv, Ukraine, on Sunday, March 13, 2022, while gathering material for a report about refugees. Ukrainian authorities said he died when Russian forces shelled the vehicle he was traveling in. (Photo by Charles Sykes/Invision/AP, File)

Condolences poured in Sunday for Brent Renaud, an Arkansas filmmaker shot and killed by Russian troops in Ukraine.

“Today, a US journalist was killed in Ukraine,” French President Emmanuel Macron said on Twitter. “Before him, others have been targeted, murdered, injured or kidnapped. Our thoughts are with all those journalists driven by courage and an ideal: the freedom to inform. This freedom is fundamental to our democracies.”

A joint statement was issued from Edward Felsenthal, editor-in-chief and CEO of Time magazine, and Ian Orefice, president and chief operating officer of Time and Time Studios: “We are devastated by the loss of Brent Renaud. As an award-winning filmmaker and journalist, Brent tackled the toughest stories around the world often alongside his brother Craig Renaud. In recent weeks, Brent was in the region working on a TIME Studios project focused on the global refugee crisis. Our hearts are with all of Brent’s loved ones. It is essential that journalists are able to safely cover this ongoing invasion and humanitarian crisis in Ukraine.”

Arkansans also expressed condolences.

“Arkansans are saddened today at the death of Brent Renaud in Ukraine,” said U.S. Sen. Tom Cotton, R-Ark. “I join them in expressing deepest condolences to the Renaud family. And I reiterate to Vladimir Putin and his military leaders that the intentional targeting of innocent civilians, including reporters, is a war crime.”

“Arkansas PBS deeply mourns the loss of our friend and colleague, Brent Renaud,” said Courtney Pledger, CEO of Arkansas PBS. “Brent was driven to tell the most intimate of human stories from across our country and the globe, often in partnership with his brother Craig. The Renaud Brothers dedicated themselves to the growth of film culture in their home state of Arkansas, and we are so much richer as a result. We will never forget Brent, his talent, his intelligence, his bravery and his unfailing integrity.”

“Brent Renaud will be remembered not only as a talented filmmaker but as an Arkansan who continuously gave back to our state to create a new generation of artists,” said Matthew J. Shepherd, speaker of the Arkansas House of Representatives. “His life’s work stands as a testament of a free and open society, which is in stark contrast to the totalitarian forces whose unprovoked invasion he was documenting when his life was taken.”

5:56 p.m.: Russian troops gun down Arkansas filmmaker Brent Renaud in Ukraine, wound two others

Arkansas filmmaker Brent Renaud was shot and killed by Russian troops in Ukraine on Sunday. Two other journalists were injured in the shooting, the police chief for the Kyiv region wrote on Facebook.

“Of course, the profession of a journalist is a risk, but US citizen Brent Renaud paid his life for trying to highlight the aggressor’s ingenuity, cruelty and ruthlessness,” Andriy Nebytov wrote.

A Ukrainian news agency reported Sunday that Renaud, 50, of Little Rock, was shot and killed by Russian troops outside Kyiv.

“I’m devastated by the loss of my close friend and long time producer, Brent Renaud,” Christof Putzel, a documentary filmmaker and television correspondent, posted on Twitter. “The world and our profession has lost one of our greatest legends. Hug your family, your colleagues, and watch the news. People are dying to bring it to you.”

Putzel expanded on that in an interview with CNN: “I woke up this morning to the news that Brent — longtime best friend, incredible colleage, the best war journalist I think ever existed — finding out about his passing. Brent had this ability to go anywhere, get any story, listen and communicate what was happening to people who wouldn’t otherwise see it. It is a devastating loss to journalism today. … When the crisis in Ukraine happened, Brent was on an airplne the very next day.”

5:02 p.m.: Friends remember life, work of Arkansas filmmaker gunned down by Russian troops

An Arkansas filmmaker who was shot and killed by Russian troops on Sunday outside Kyiv had gone there to shed light on the atrocities being committed, a correspondent for PBS NewsHour said on Twitter.

“Brent Renaud was killed while filming civilians escaping a Russian military onslaught on their small town near Kiev,” Jane Ferguson tweeted on Sunday. “The Russian military has not spared civilians or journalists throughout this war, something Renaud himself came here to make the world all the more aware of.”

In a tweet earlier Sunday, Ferguson said she had seen Renaud’s body under a blanket.

“Just left roadside spot near Irpin where body of American journalist Brent Renaud lay under a blanket,” she wrote. “Ukrainian medics could do nothing to help him by that stage. Outraged Ukrainian police officer: ‘Tell America, tell the world, what they did to a journalist.'”

Brent Anthony Renaud, 50, was born in Memphis and grew up in Little Rock, where he graduated from Hall High School.

His father, Louis, was a salesman, and his mother, Georgann Freasier, was a social worker, according to The New York Times.

Brent Renaud and his brother, Craig, were a Peabody Award-winning documentary film team that drew attention to human suffering, often working with major news organizations like The New York Times, according to that newspaper.

Craig Renaud told The New York Times that his brother was in Ukraine working for MSNBC and for the television and film division of Time magazine. He was working on one segment of “Tipping Point,” a multipart series about refugees around the world.

“Migration under desperate circumstances was a recurring subject for Brent, who with Craig also made documentaries about Haitians deported from the United States and children fleeing poverty and danger in Central America,” according to The New York Times.

The Renaud brothers won their Peabody Award for “Last Chance High,” which tells the story of Chicago’s Moses Montefiore Academy, whose students suffer from emotional disorders and have been expelled from other public schools in the city.

Brent Renaud earned a master of arts degree from Columbia University and was a 2019 Nieman Journalism Fellow at Harvard University.

3 p.m.: U.S. journalist, founder of Little Rock Film Festival, killed by attack near Kyiv

Arkansas filmmaker Brent Renaud was shot and killed Sunday when Russian forces fired on the car in which he was traveling outside Kyiv, Ukraine, Kyiv Region police reported.

Juan Arredondo, a filmmaker who was shot in the same car, gave a brief interview at Okhmatdyt, the largest children’s hospital in Kyiv, just before being wheeled in to the operating room for surgery.

“We crossed one, the first bridge in Irpin,” Arredondo said in the hospital’s post on Instagram. “We were going to film other refugees leaving. And we got into a car. Somebody offered to take us to the other bridge. And we crossed a checkpoint, and they start shooting at us. So the driver turned around, and they kept shooting. Two of us. My friend, Brent Renaud, and he’s been shot and left behind.”

Arredondo said he didn’t know what had happened to Renaud.

“I saw his being shot in the neck. And we got split,” Arredondo said.

Journalists have been forbidden from entering Irpin since Renaud’s death, according to The Kyiv Independent.

A New York Times spokesperson said Renaud, 50, was a “talented filmmaker who had contributed to The New York Times over the years.” It said he was not working for the publication at the time of his death. Renaud was wearing a New York Times badge, according to reports.

Renaud and his brother Craig founded the Little Rock Film Festival, which concluded in 2015 after a nine-year run.

Kyiv Region police said: “Of course, the profession of journalism carries risks. Nonetheless, U.S. citizen Brent Renaud paid with his life trying to highlight the deceit, cruelty and ruthlessness of the aggressor.”

Asked about the reports, White House national security adviser Jake Sullivan told CBS News that the U.S. government would be consulting with the Ukrainians to determine how this happened and would then “execute appropriate consequences.”

“This is part and parcel of what has been a brazen aggression on the part of the Russians, where they have targeted civilians, they have targeted hospitals, they have targeted places of worship, and they have targeted journalists,” Sullivan said.

XXXX

President Reagan, Nancy Reagan, Bill Clinton and Hillary Clinton attending the Dinner Honoring the Nation’s Governors. 2/22/87.

ronald reagan debates walter mondale in 1984 Presidential race second clip

Lee Edwards of the Heritage Foundation wrote an excellent article on Ronald Reagan and the events that transpired during the Reagan administration,  and I wanted to share it with you. Here is the fifth portion:

Though Reagan promised deep cuts in domestic spending, that did not turn out to be the case. Indeed, overall welfare spending increased during the Reagan presidency — primarily because Reagan could not overcome, even with vetoes and the bully pulpit of the White House, the spending impulses of Congress, which, after all, signed the checks. Throughout his two terms, he was confronted by Democrats still enthralled by the New Deal as well as Republicans (particularly in the Senate) still mesmerized by its political appeal.

When the administration proposed to abolish the Department of Education in 1981, Howard Baker, the first Republican Senate majority leader since 1954, actively opposed abolition.[x] Baker wanted to remain majority leader and was worried that getting rid of the department would alienate too many voters.

Reagan was not discouraged. He understood he had to proceed prudently with cuts, one billion dollars at a time — he could not just pull the plug on the federal government. Over the past fifty years, millions of people had grown dependent upon it.

Many people remember Reagan saying in his inaugural address that “government is not the solution to our problems; government is the problem.” But the new president also said:

It is not my intention to do away with government. It is rather to make it work — work with us, not over us; to stand by our side, not ride on our back. Government can and must provide opportunity, not smother it; foster productivity, not stifle it.[xi]

Here was no radical libertarian with a copy of Atlas Shrugged in his back pocket but a traditional conservative guided by the prudential arguments of The Federalist. Reagan was a modern federalist, echoing James Madison’s call for a balance between the authority of the national and state governments. He also shared Madison’s concern about “the abridgement of the freedom of the people” by the “gradual and silent encroachment of those in power.” As he later said in his 1990 autobiography, “We had strayed a great distance from our founding fathers’ vision of America.”[xii]

He was determined to recapture that lost vision. As he stated in his inaugural, he would begin by seeking to “curb the size and influence of the federal establishment.” Revealing his pragmatism, his immediate target was the welfare excesses of Lyndon B. Johnson, not the long-established social programs of Franklin D. Roosevelt. As he wrote in his diary in January 1982, “The press is trying to paint me as trying to undo the New Deal. I’m trying to undo the Great Society.”[xiii]

It was a slow uneven process, always made more difficult by a Democratic House of Representatives. He was obliged to allow federal spending for welfare — work programs, education and training, social services, medicine, food and housing — to rise sharply; expenditures almost doubled from $106.1 billion (in real or nominal dollars) in 1980 to $173 billion in 1988.[xiv] Nor did Reagan’s own cabinet secretaries protest when the increases benefited their agency or department.

Conservative critics like the Heritage Foundation’s Stuart Butler did not try to hide their disappointment and frustration. Six years into the Reagan presidency, Butler wrote that “the basic structure of the Great Society is still firmly intact …. virtually no program has been eliminated.”[xv]

But Reagan reduced federal outlays in some welfare areas — such as regional development, commerce and housing credit — from $63 billion in 1980 to just over $49 billion in 1987, a decrease of about 22 percent. And the size of the federal civilian work force declined by about five percent, much of it traceable to conservatives like Gerald Carmen at GSA, Raymond Donovan at Labor and the OPM’s Donald Devine, described by the Washington Post as “Reagan’s terrible swift sword of the civil service.”[xvi] The agencies that led the personnel downsizing were Education, down twenty-four percent; Housing and Urban Development, down twenty-two percent; Office of Personnel Management, down nineteen percent; and Government Services Administration and Labor, both down fifteen percent.

Dan Mitchell “Biden has embraced a reckless Bernie Sanders-type agenda of budget profligacy, class-warfare taxes, regulatory excess, and crass protectionism that is too extreme for sane people on the left”

[

The Failure of Bidenomics, Part II

Yesterday’s column explained that Biden’s proposals to expand the welfare state were bad news, in part because government subsidies often lead to inefficiency and higher prices.

That’s not a smart strategy when inflation already is at 40-year highs.

President Biden did address the topic of rising prices during his speech, but his approach was so incoherent that even Larry Summers (Treasury Secretary for Bill Clinton and head of the National Economic Council for Barack Obama) felt compelled to share some critical tweets.

This is remarkable. I’ve spent the past three decades fighting against some of Summers’ bad ideas on fiscal policy (he was a big supporter of the OECD’s anti-tax competition project, for instance).

But now we’re sort of on the same side (at least on a few issues) because Biden has embraced a reckless Bernie Sanders-type agenda of budget profligacy, class-warfare taxes, regulatory excess, and crass protectionism that is too extreme for sane people on the left.

Along with a head-in-the-sand view of monetary policy.

In a column for Canada’s Fraser Institute, Robert O’Quinn and I addressed Biden’s strange comments on inflation.

Here’s some of what we wrote on that topic.

After a disastrous first year pursuing an agenda that became increasingly unpopular, President Biden had an opportunity to reset his administration in a centrist direction as part of his first State of the Union Address. But he didn’t.On every domestic issue, he catered to the Democratic Party’s hardcore left-wing activists… Inflation, as Nobel laureate Milton Friedman observed, is always and everywhere a monetary phenomenon. …In his speech, Biden ignored the true cause of inflation. Instead, he offered a grab bag of statist ideas such as aggressive antitrust enforcement, price controls on prescription drugs, and tax credits for energy conservation and green energy—policies that, whatever their merits, have little or nothing to do with inflation.

Our basic message is that Biden ignored the real cause of inflation (bad monetary policy by the Federal Reserve) and instead came up with ideas (either bad or irrelevant) to addresses the symptom(s) of inflation.

We also noted that Biden’s nominees to the Federal Reserve are underwhelming.

Moreover, he has been pushing three controversial nominees to the Federal Reserve Board—Sarah Bloom Raskin, Lisa Cook and Philip Jefferson—who lack monetary expertise and are generally regarded as inflation doves. Raskin’s primary “qualification” is her support for using the Fed’s regulatory powers to divert credit away from oil and natural gas production. Cook and Jefferson have primarily written about poverty and race, which are outside of the Fed’s legislative mandate.

What we need is a president – like Ronald Reagan – who understands that the inflation genie needs to be put back in the bottle and thus pushes the Federal Reserve in the right direction.

Instead, we have a president who thinks it’s a place where left-leaning activists should get patronage appointments.

P.S. If you have the time and interest, here’s an 40-minute videoexplaining the Federal Reserve’s track record of bad monetary policy.

P.P.S. If you’re constrained for time, I recommend this five-minute video on alternatives to the Federal Reserve and this six-minute video on how people can protect themselves from bad monetary policy.

The Best President in Recent History

Since I view Ronald Reagan as an honorary libertarian, I was very happy back in 2013 to see that he won a landslide victory over Barack Obama in a hypothetical poll.

This meant that voters either were old enough to personally experience the benefits of Reaganomics, or they managed to learn some history (in spite of a biased education establishment).

Well, now I have another reason to be happy. According to a new poll shared by Paul Bedard of the Washington Examiner, nearly 70 percent of respondents have a favorable impression of Reagan, easily the best result for all recent presidents.

Reagan also is disliked by the smallest percentage of respondents, a fact that almost surely irks some of my Reagan-hating friends.

And definitely irks Paul Krugman.

My two cents for today is that the current fight between Trumpism and establishment Republicanism is merely stylistic. If you crunch the numbers, you’ll see that both camps are big spenders.

I much prefer Reaganism.

Let’s wrap up with this cartoon strip that captures my sentiments.

P.S. Here’s an amusing story from Reagan about socialism (h/t: Don Boudreaux).

Not quite as good as this video, and it’s not even good enough to get added to this collection of Reagan videos, but it is a good description of why socialism is a failure.

P.S. There was one other president in the 20th century who deserves praise and applause.

Tax Cartels Mean Ever-Higher Tax Rates

When President Biden proposed a “global minimum tax” for businesses, I immediately warned that would lead to ever-increasing tax rates.

Ross Kaminsky of KHOW and I discussed how this is already happening.

I hate being right, but it’s always safe to predict that politicians and bureaucrats will embrace policies that give more power to government.

Especially when they are very anxious to stifle tax competition.

For decades, people in government have been upset that the tax cuts implemented by Ronald Reagan and Margaret Thatchertriggered a four-decade trend of lower tax rates and pro-growth tax reform.

That’s the reason Biden and his Treasury Secretary proposed a 15 percent minimum tax rate for businesses.

And it’s the reason they now want the rate to be even higher.

Though even I’m surprised that they’re already pushing for that outcome when the original pact hasn’t even been approved or implemented.

Here are some passages from a report by Reuters.

Treasury Secretary Janet Yellen will press G20 counterparts this week for a global minimum corporate tax rate above the 15% floor agreed by 130 countries last week…the global minimum tax rate…is tied to the outcome of legislation to raise the U.S. minimum tax rate, a Treasury official said.The Biden administration has proposed doubling the U.S. minimum tax on corporations overseas intangible income to 21% along with a new companion “enforcement” tax that would deny deductions to companies for tax payments to countries that fail to adopt the new global minimum rate. The officials said several countries were pushing for a rate above 15%, along with the United States.

Other kleptocratic governments naturally want the same thing.

A G7 proposal for a global minimum tax rate of 15% is too low and a rate of at least 21% is needed, Argentina’s finance minister said on Monday, leading a push by some developing countries… “The 15% rate is way too low,” Argentine Finance Minister Martin Guzman told an online panel hosted by the Independent Commission for the Reform of International Corporate Taxation. …”The minimum rate being proposed would not do much to countries in Africa…,” Mathew Gbonjubola, Nigeria’s tax policy director, told the same conference.

Needless to say, I’m not surprised that Argentina is on the wrong side.

And supporters of class warfare also are agitating for a higher minimum rate. Here are some excerpts from a column in the New York Times by Gabriel Zucman and Gus Wezerek.

In the decades after World War II, close to 50 percent of American companies’ earnings went to state and federal taxes. …it was a golden period. …President Biden should be applauded for trying to end the race to the bottom on corporate tax rates. But even if Congress approves the 15 percent global minimum corporate tax, it won’t be enough. …the Biden administration to give working families a real leg up, it should push Congress to enact a 25 percent minimum tax, which would bring in about $200 billion in additional revenue each year. …With a 25 percent minimum corporate tax, the Biden administration would begin to reverse decades of growing inequality. And it would encourage other countries to do the same, replacing a race to the bottom with a sprint to the top.

I can’t resist making two observations about this ideological screed.

  1. Even the IMF and OECD agree that the so-called race to the bottom has not led to a decline in corporate tax revenues, even when measured as a share of economic output.
  2. Since companies legally avoid rather than illegally evade taxes, the headline of the column is utterly dishonest – but it’s what we’ve learned to expect from the New York Times.

The only good thing about the Zucman-Wezerek column is that it includes this chart showing how corporate tax rates have dramatically declined since 1980.

P.S. For those interested, the horizontal line at the bottom is for Bermuda, though other jurisdictions (such as Monaco and the Cayman Islands) also deserve credit for having no corporate income taxes.

P.P.S. If you want to know why high corporate tax rates are misguided, click here. And if you want to know why Biden’s plan to raise the U.S. corporate tax rate is misguided, click here. Or here. Or here.

P.P.P.S. And if you want more information about why Biden’s global tax cartel is bad, click here, here, and here.

I enjoyed this article below because it demonstrates that the Laffer Curve has been working for almost 100 years now when it is put to the test in the USA. I actually got to hear Arthur Laffer speak in person in 1981 and he told us in advance what was going to happen the 1980’s and it all came about as he said it would when Ronald Reagan’s tax cuts took place. I wish we would lower taxes now instead of looking for more revenue through raised taxes. We have to grow the economy:

What Mitt Romney Said Last Night About Tax Cuts And The Deficit Was Absolutely Right. And What Obama Said Was Absolutely Wrong.

Mitt Romney repeatedly said last night that he would not allow tax cuts to add to the deficit.  He repeatedly said it because over and over again Obama blathered the liberal talking point that cutting taxes necessarily increased deficits.

Romney’s exact words: “I want to underline that — no tax cut that adds to the deficit.”

Meanwhile, Obama has promised to cut the deficit in half during his first four years – but instead gave America the highest deficits in the history of the entire human race.

I’ve written about this before.  Let’s replay what has happened every single time we’ve ever cut the income tax rate.

The fact of the matter is that we can go back to Calvin Coolidge who said very nearly THE EXACT SAME THING to his treasury secretary: he too would not allow any tax cuts that added to the debt.  Andrew Mellon – quite possibly the most brilliant economic mind of his day – did a great deal of research and determined what he believed was the best tax rate.  And the Coolidge administration DID cut income taxes and MASSIVELY increased revenues.  Coolidge and Mellon cut the income tax rate 67.12 percent (from 73 to 24 percent); and revenues not only did not go down, but they went UP by at least 42.86 percent (from $700 billion to over $1 billion).

That’s something called a documented fact.  But that wasn’t all that happened: another incredible thing was that the taxes and percentage of taxes paid actually went UP for the rich.  Because as they were allowed to keep more of the profits that they earned by investing in successful business, they significantly increased their investments and therefore paid more in taxes than they otherwise would have had they continued sheltering their money to protect themselves from the higher tax rates.  Liberals ignore reality, but it is simply true.  It is a fact.  It happened.

Then FDR came along and raised the tax rates again and the opposite happened: we collected less and less revenue while the burden of taxation fell increasingly on the poor and middle class again.  Which is exactly what Obama wants to do.

People don’t realize that John F. Kennedy, one of the greatest Democrat presidents, was a TAX CUTTER who believed the conservative economic philosophy that cutting tax rates would in fact increase tax revenues.  He too cut taxes, and he too increased tax revenues.

So we get to Ronald Reagan, who famously cut taxes.  And again, we find that Reagan cut that godawful liberal tax rate during an incredibly godawful liberal-caused economic recession, and he increased tax revenue by 20.71 percent (with revenues increasing from $956 billion to $1.154 trillion).  And again, the taxes were paid primarily by the rich:

“The share of the income tax burden borne by the top 10 percent of taxpayers increased from 48.0 percent in 1981 to 57.2 percent in 1988. Meanwhile, the share of income taxes paid by the bottom 50 percent of taxpayers dropped from 7.5 percent in 1981 to 5.7 percent in 1988.”

So we get to George Bush and the Bush tax cuts that liberals and in particular Obama have just demonized up one side and demagogued down the other.  And I can simply quote the New York Times AT the time:

Sharp Rise in Tax Revenue to Pare U.S. Deficit By EDMUND L. ANDREWS Published: July 13, 2005

WASHINGTON, July 12 – For the first time since President Bush took office, an unexpected leap in tax revenue is about to shrink the federal budget deficit this year, by nearly $100 billion.

A Jump in Corporate Payments On Wednesday, White House officials plan to announce that the deficit for the 2005 fiscal year, which ends in September, will be far smaller than the $427 billion they estimated in February.

Mr. Bush plans to hail the improvement at a cabinet meeting and to cite it as validation of his argument that tax cuts would stimulate the economy and ultimately help pay for themselves.

Based on revenue and spending data through June, the budget deficit for the first nine months of the fiscal year was $251 billion, $76 billion lower than the $327 billion gap recorded at the corresponding point a year earlier.

The Congressional Budget Office estimated last week that the deficit for the full fiscal year, which reached $412 billion in 2004, could be “significantly less than $350 billion, perhaps below $325 billion.”

The big surprise has been in tax revenue, which is running nearly 15 percent higher than in 2004. Corporate tax revenue has soared about 40 percent, after languishing for four years, and individual tax revenue is up as well
.

And of course the New York Times, as reliable liberals, use the adjective whenever something good happens under conservative policies and whenever something bad happens under liberal policies: ”unexpected.”   But it WASN’T ”unexpected.”  It was EXACTLY what Republicans had said would happen and in fact it was exactly what HAD IN FACT HAPPENED every single time we’ve EVER cut income tax rates.

The truth is that conservative tax policy has a perfect track record: every single time it has ever been tried, we have INCREASED tax revenues while not only exploding economic activity and creating more jobs, but encouraging the wealthy to pay more in taxes as well.  And liberals simply dishonestly refuse to acknowledge documented history.

Meanwhile, liberals also have a perfect record … of FAILUREThey keep raising taxes and keep not understanding why they don’t get the revenues they predicted.

The following is a section from my article, “Tax Cuts INCREASE Revenues; They Have ALWAYS Increased Revenues“, where I document every single thing I said above:

The Falsehood That Tax Cuts Increase The Deficit

Now let’s take a look at the utterly fallacious view that tax cuts in general create higher deficits.

Let’s take a trip back in time, starting with the 1920s.  From Burton Folsom’s book, New Deal or Raw Deal?:

In 1921, President Harding asked the sixty-five-year-old [Andrew] Mellon to be secretary of the treasury; the national debt [resulting from WWI] had surpassed $20 billion and unemployment had reached 11.7 percent, one of the highest rates in U.S. history.  Harding invited Mellon to tinker with tax rates to encourage investment without incurring more debt. Mellon studied the problem carefully; his solution was what is today called “supply side economics,” the idea of cutting taxes to stimulate investment.  High income tax rates, Mellon argued, “inevitably put pressure upon the taxpayer to withdraw this capital from productive business and invest it in tax-exempt securities. . . . The result is that the sources of taxation are drying up, wealth is failing to carry its share of the tax burden; and capital is being diverted into channels which yield neither revenue to the Government nor profit to the people” (page 128).

Mellon wrote, “It seems difficult for some to understand that high rates of taxation do not necessarily mean large revenue to the Government, and that more revenue may often be obtained by lower taxes.”  And he compared the government setting tax rates on incomes to a businessman setting prices on products: “If a price is fixed too high, sales drop off and with them profits.”

And what happened?

“As secretary of the treasury, Mellon promoted, and Harding and Coolidge backed, a plan that eventually cut taxes on large incomes from 73 to 24 percent and on smaller incomes from 4 to 1/2 of 1 percent.  These tax cuts helped produce an outpouring of economic development – from air conditioning to refrigerators to zippers, Scotch tape to radios and talking movies.  Investors took more risks when they were allowed to keep more of their gains.  President Coolidge, during his six years in office, averaged only 3.3 percent unemployment and 1 percent inflation – the lowest misery index of any president in the twentieth century.

Furthermore, Mellon was also vindicated in his astonishing predictions that cutting taxes across the board would generate more revenue.  In the early 1920s, when the highest tax rate was 73 percent, the total income tax revenue to the U.S. government was a little over $700 million.  In 1928 and 1929, when the top tax rate was slashed to 25 and 24 percent, the total revenue topped the $1 billion mark.  Also remarkable, as Table 3 indicates, is that the burden of paying these taxes fell increasingly upon the wealthy” (page 129-130).

Now, that is incredible upon its face, but it becomes even more incredible when contrasted with FDR’s antibusiness and confiscatory tax policies, which both dramatically shrunk in terms of actual income tax revenues (from $1.096 billion in 1929 to $527 million in 1935), and dramatically shifted the tax burden to the backs of the poor by imposing huge new excise taxes (from $540 million in 1929 to $1.364 billion in 1935).  See Table 1 on page 125 of New Deal or Raw Deal for that information.

FDR both collected far less taxes from the rich, while imposing a far more onerous tax burden upon the poor.

It is simply a matter of empirical fact that tax cuts create increased revenue, and that those [Democrats] who have refused to pay attention to that fact have ended up reducing government revenues even as they increased the burdens on the poorest whom they falsely claim to help.

Let’s move on to John F. Kennedy, one of the most popular Democrat presidents ever.  Few realize that he was also a supply-side tax cutter.

Kennedy said:

“It is a paradoxical truth that tax rates are too high and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now … Cutting taxes now is not to incur a budget deficit, but to achieve the more prosperous, expanding economy which can bring a budget surplus.”

– John F. Kennedy, Nov. 20, 1962, president’s news conference


“Lower rates of taxation will stimulate economic activity and so raise the levels of personal and corporate income as to yield within a few years an increased – not a reduced – flow of revenues to the federal government.”

– John F. Kennedy, Jan. 17, 1963, annual budget message to the Congress, fiscal year 1964

“In today’s economy, fiscal prudence and responsibility call for tax reduction even if it temporarily enlarges the federal deficit – why reducing taxes is the best way open to us to increase revenues.”

– John F. Kennedy, Jan. 21, 1963, annual message to the Congress: “The Economic Report Of The President”


“It is no contradiction – the most important single thing we can do to stimulate investment in today’s economy is to raise consumption by major reduction of individual income tax rates.”

– John F. Kennedy, Jan. 21, 1963, annual message to the Congress: “The Economic Report Of The President”


“Our tax system still siphons out of the private economy too large a share of personal and business purchasing power and reduces the incentive for risk, investment and effort – thereby aborting our recoveries and stifling our national growth rate.”

– John F. Kennedy, Jan. 24, 1963, message to Congress on tax reduction and reform, House Doc. 43, 88th Congress, 1st Session.


“A tax cut means higher family income and higher business profits and a balanced federal budget. Every taxpayer and his family will have more money left over after taxes for a new car, a new home, new conveniences, education and investment. Every businessman can keep a higher percentage of his profits in his cash register or put it to work expanding or improving his business, and as the national income grows, the federal government will ultimately end up with more revenues.”

– John F. Kennedy, Sept. 18, 1963, radio and television address to the nation on tax-reduction bill

Which is to say that modern Democrats are essentially calling one of their greatest presidents a liar when they demonize tax cuts as a means of increasing government revenues.

So let’s move on to Ronald Reagan.  Reagan had two major tax cutting policies implemented: the Economic Recovery Tax Act (ERTA) of 1981, which was retroactive to 1981, and the Tax Reform Act of 1986.

Did Reagan’s tax cuts decrease federal revenues?  Hardly:

We find that 8 of the following 10 years there was a surplus of revenue from 1980, prior to the Reagan tax cuts.  And, following the Tax Reform Act of 1986, there was a MASSIVE INCREASEof revenue.

So Reagan’s tax cuts increased revenue.  But who paid the increased tax revenue?  The poor?  Opponents of the Reagan tax cuts argued that his policy was a giveaway to the rich (ever heard that one before?) because their tax payments would fall.  But that was exactly wrong.  In reality:

“The share of the income tax burden borne by the top 10 percent of taxpayers increased from 48.0 percent in 1981 to 57.2 percent in 1988. Meanwhile, the share of income taxes paid by the bottom 50 percent of taxpayers dropped from 7.5 percent in 1981 to 5.7 percent in 1988.”

So Ronald Reagan a) collected more total revenue, b) collected more revenue from the rich, while c) reducing revenue collected by the bottom half of taxpayers, and d) generated an economic powerhouse that lasted – with only minor hiccups – for nearly three decades.  Pretty good achievement considering that his predecessor was forced to describe his own economy as a “malaise,” suffering due to a “crisis of confidence.” Pretty good considering that President Jimmy Carter responded to a reporter’s question as to what he would do about the problem of inflation by answering, “It would be misleading for me to tell any of you that there is a solution to it.”

Reagan whipped inflation.  Just as he whipped that malaise and that crisis of confidence.

________

The Laffer Curve, Part III: Dynamic Scoring

Return of ‘the Evil Empire’? 

“Evil Empire” Speech by President Reagan – Address to the National Assoc…

 width=

Displaying photos of Cuban missile sites, then-President Ronald Reagan called Russia “the evil empire” at a March 23, 1983, press conference. (Photo: Penelope Breese/Liaison/Hulton Archive/Getty Images)

Regardless of what any American feels about what steps we should take in response to Russian President Vladimir Putin’s aggressive incursion into Ukraine, for sure most are appalled by what he has done.

As Putin moves to regain Russian control over nations that once were part of the Soviet sphere, we ought to think about the circumstances under which the Soviet Union collapsed to consider how it all might be reversed.

In March 1983, President Ronald Reagan spoke to the National Association of Evangelicals in Orlando, Florida, and delivered what would famously become known as the speech in which he called the Soviet Union the “evil empire.”

Discussing America’s efforts to confront the Soviet Union’s nuclear arsenal, he said: “I urge you to beware the temptation of pride … declaring yourselves above it all and label both sides equally at fault, to ignore the facts of history and the aggressive impulses of an evil empire … and thereby remove yourself from the struggle between right and wrong and good and evil.”

Reagan spoke more than powerful words of truth that day. He spoke almost as a prophet.

He noted further: “While America’s military strength is important, let me add here that I’ve always maintained that the struggle now going on for the world will never be decided by bombs or rockets, by armies or military might. The real crisis we face today is a spiritual one; at root, it is a test of moral will and faith.”

Some eight years later, the Soviet Union, which for years during the Cold War was thought to be the superpower rival to the United States, collapsed.

There was no war. There was just resolve and Reagan’s unwavering commitment to the principles he articulated that day in 1983. And eight years after that speech, in 1991, Ukraine, now under siege by Putin, was freed from subjugation under the Soviet regime and declared its freedom, independence, and sovereignty.

As Putin tries to reverse history, it is incumbent upon us to not forget that Reagan declared the global struggle as first and foremost a spiritual struggle, a struggle of good against evil.

As Americans watch events unfold in Ukraine, we must refocus on what is going on in our own country. If we lose a sense of the importance and relevance of Reagan’s words as they apply at home, we surely will not know how to relate to events as they transpire in the rest of the world.

And there is plenty of reason to believe we are losing that perspective at home. We see a direct correlation within our own borders, in our own country, of the decline in faith in the eternal principles that keep us free, and with this decline, Americans are gradually but decisively choosing to abandon their freedom.

In a survey published at the end of last year, Gallup reported that 69% of Americans self-identified as Christians in 2021, compared with 90% who self-identified as Christians in 1971. Twenty-one percent said they have “no religion” in 2021, compared to 4% in 1971. In 1965, 70% of Americans said religion is “very important” to them. By 2021, this was down to 49%.

Coincident with the decline of the importance that Americans give to religion, Americans have turned their lives increasingly over to government control. In 1950, government at federal, state, and local levels took almost 23% of the American economy. In 2020, this reached almost 45%.

Turning back again to Reagan’s words, “But we must never forget that no government schemes are going to perfect man.” Our struggle, said Reagan, is about good and evil.

It’s no accident that as America retreats in this struggle, as Americans increasingly believe that government can perfect man, and as we relinquish our freedom, despots like Putin will step forward and try to move the world back to a darker time.

COPYRIGHT 2022 CREATORS.COM

The Daily Signal publishes a variety of perspectives. Nothing written here is to be construed as representing the views of The Heritage Foundation.

Have an opinion about this article? To sound off, please email letters@DailySignal.com and we’ll consider publishing your edited remarks in our regular “We Hear You” feature. Remember to include the url or headline of the article plus your name and town and/or state.

Tax Cartels Mean Ever-Higher Tax Rates

When President Biden proposed a “global minimum tax” for businesses, I immediately warned that would lead to ever-increasing tax rates.

Ross Kaminsky of KHOW and I discussed how this is already happening.

I hate being right, but it’s always safe to predict that politicians and bureaucrats will embrace policies that give more power to government.

Especially when they are very anxious to stifle tax competition.

For decades, people in government have been upset that the tax cuts implemented by Ronald Reagan and Margaret Thatchertriggered a four-decade trend of lower tax rates and pro-growth tax reform.

That’s the reason Biden and his Treasury Secretary proposed a 15 percent minimum tax rate for businesses.

And it’s the reason they now want the rate to be even higher.

Though even I’m surprised that they’re already pushing for that outcome when the original pact hasn’t even been approved or implemented.

Here are some passages from a report by Reuters.

Treasury Secretary Janet Yellen will press G20 counterparts this week for a global minimum corporate tax rate above the 15% floor agreed by 130 countries last week…the global minimum tax rate…is tied to the outcome of legislation to raise the U.S. minimum tax rate, a Treasury official said.The Biden administration has proposed doubling the U.S. minimum tax on corporations overseas intangible income to 21% along with a new companion “enforcement” tax that would deny deductions to companies for tax payments to countries that fail to adopt the new global minimum rate. The officials said several countries were pushing for a rate above 15%, along with the United States.

Other kleptocratic governments naturally want the same thing.

A G7 proposal for a global minimum tax rate of 15% is too low and a rate of at least 21% is needed, Argentina’s finance minister said on Monday, leading a push by some developing countries… “The 15% rate is way too low,” Argentine Finance Minister Martin Guzman told an online panel hosted by the Independent Commission for the Reform of International Corporate Taxation. …”The minimum rate being proposed would not do much to countries in Africa…,” Mathew Gbonjubola, Nigeria’s tax policy director, told the same conference.

Needless to say, I’m not surprised that Argentina is on the wrong side.

And supporters of class warfare also are agitating for a higher minimum rate. Here are some excerpts from a column in the New York Times by Gabriel Zucman and Gus Wezerek.

In the decades after World War II, close to 50 percent of American companies’ earnings went to state and federal taxes. …it was a golden period. …President Biden should be applauded for trying to end the race to the bottom on corporate tax rates. But even if Congress approves the 15 percent global minimum corporate tax, it won’t be enough. …the Biden administration to give working families a real leg up, it should push Congress to enact a 25 percent minimum tax, which would bring in about $200 billion in additional revenue each year. …With a 25 percent minimum corporate tax, the Biden administration would begin to reverse decades of growing inequality. And it would encourage other countries to do the same, replacing a race to the bottom with a sprint to the top.

I can’t resist making two observations about this ideological screed.

  1. Even the IMF and OECD agree that the so-called race to the bottom has not led to a decline in corporate tax revenues, even when measured as a share of economic output.
  2. Since companies legally avoid rather than illegally evade taxes, the headline of the column is utterly dishonest – but it’s what we’ve learned to expect from the New York Times.

The only good thing about the Zucman-Wezerek column is that it includes this chart showing how corporate tax rates have dramatically declined since 1980.

P.S. For those interested, the horizontal line at the bottom is for Bermuda, though other jurisdictions (such as Monaco and the Cayman Islands) also deserve credit for having no corporate income taxes.

P.P.S. If you want to know why high corporate tax rates are misguided, click here. And if you want to know why Biden’s plan to raise the U.S. corporate tax rate is misguided, click here. Or here. Or here.

P.P.P.S. And if you want more information about why Biden’s global tax cartel is bad, click here, here, and here.

I enjoyed this article below because it demonstrates that the Laffer Curve has been working for almost 100 years now when it is put to the test in the USA. I actually got to hear Arthur Laffer speak in person in 1981 and he told us in advance what was going to happen the 1980’s and it all came about as he said it would when Ronald Reagan’s tax cuts took place. I wish we would lower taxes now instead of looking for more revenue through raised taxes. We have to grow the economy:

What Mitt Romney Said Last Night About Tax Cuts And The Deficit Was Absolutely Right. And What Obama Said Was Absolutely Wrong.

Mitt Romney repeatedly said last night that he would not allow tax cuts to add to the deficit.  He repeatedly said it because over and over again Obama blathered the liberal talking point that cutting taxes necessarily increased deficits.

Romney’s exact words: “I want to underline that — no tax cut that adds to the deficit.”

Meanwhile, Obama has promised to cut the deficit in half during his first four years – but instead gave America the highest deficits in the history of the entire human race.

I’ve written about this before.  Let’s replay what has happened every single time we’ve ever cut the income tax rate.

The fact of the matter is that we can go back to Calvin Coolidge who said very nearly THE EXACT SAME THING to his treasury secretary: he too would not allow any tax cuts that added to the debt.  Andrew Mellon – quite possibly the most brilliant economic mind of his day – did a great deal of research and determined what he believed was the best tax rate.  And the Coolidge administration DID cut income taxes and MASSIVELY increased revenues.  Coolidge and Mellon cut the income tax rate 67.12 percent (from 73 to 24 percent); and revenues not only did not go down, but they went UP by at least 42.86 percent (from $700 billion to over $1 billion).

That’s something called a documented fact.  But that wasn’t all that happened: another incredible thing was that the taxes and percentage of taxes paid actually went UP for the rich.  Because as they were allowed to keep more of the profits that they earned by investing in successful business, they significantly increased their investments and therefore paid more in taxes than they otherwise would have had they continued sheltering their money to protect themselves from the higher tax rates.  Liberals ignore reality, but it is simply true.  It is a fact.  It happened.

Then FDR came along and raised the tax rates again and the opposite happened: we collected less and less revenue while the burden of taxation fell increasingly on the poor and middle class again.  Which is exactly what Obama wants to do.

People don’t realize that John F. Kennedy, one of the greatest Democrat presidents, was a TAX CUTTER who believed the conservative economic philosophy that cutting tax rates would in fact increase tax revenues.  He too cut taxes, and he too increased tax revenues.

So we get to Ronald Reagan, who famously cut taxes.  And again, we find that Reagan cut that godawful liberal tax rate during an incredibly godawful liberal-caused economic recession, and he increased tax revenue by 20.71 percent (with revenues increasing from $956 billion to $1.154 trillion).  And again, the taxes were paid primarily by the rich:

“The share of the income tax burden borne by the top 10 percent of taxpayers increased from 48.0 percent in 1981 to 57.2 percent in 1988. Meanwhile, the share of income taxes paid by the bottom 50 percent of taxpayers dropped from 7.5 percent in 1981 to 5.7 percent in 1988.”

So we get to George Bush and the Bush tax cuts that liberals and in particular Obama have just demonized up one side and demagogued down the other.  And I can simply quote the New York Times AT the time:

Sharp Rise in Tax Revenue to Pare U.S. Deficit By EDMUND L. ANDREWS Published: July 13, 2005

WASHINGTON, July 12 – For the first time since President Bush took office, an unexpected leap in tax revenue is about to shrink the federal budget deficit this year, by nearly $100 billion.

A Jump in Corporate Payments On Wednesday, White House officials plan to announce that the deficit for the 2005 fiscal year, which ends in September, will be far smaller than the $427 billion they estimated in February.

Mr. Bush plans to hail the improvement at a cabinet meeting and to cite it as validation of his argument that tax cuts would stimulate the economy and ultimately help pay for themselves.

Based on revenue and spending data through June, the budget deficit for the first nine months of the fiscal year was $251 billion, $76 billion lower than the $327 billion gap recorded at the corresponding point a year earlier.

The Congressional Budget Office estimated last week that the deficit for the full fiscal year, which reached $412 billion in 2004, could be “significantly less than $350 billion, perhaps below $325 billion.”

The big surprise has been in tax revenue, which is running nearly 15 percent higher than in 2004. Corporate tax revenue has soared about 40 percent, after languishing for four years, and individual tax revenue is up as well
.

And of course the New York Times, as reliable liberals, use the adjective whenever something good happens under conservative policies and whenever something bad happens under liberal policies: ”unexpected.”   But it WASN’T ”unexpected.”  It was EXACTLY what Republicans had said would happen and in fact it was exactly what HAD IN FACT HAPPENED every single time we’ve EVER cut income tax rates.

The truth is that conservative tax policy has a perfect track record: every single time it has ever been tried, we have INCREASED tax revenues while not only exploding economic activity and creating more jobs, but encouraging the wealthy to pay more in taxes as well.  And liberals simply dishonestly refuse to acknowledge documented history.

Meanwhile, liberals also have a perfect record … of FAILUREThey keep raising taxes and keep not understanding why they don’t get the revenues they predicted.

The following is a section from my article, “Tax Cuts INCREASE Revenues; They Have ALWAYS Increased Revenues“, where I document every single thing I said above:

The Falsehood That Tax Cuts Increase The Deficit

Now let’s take a look at the utterly fallacious view that tax cuts in general create higher deficits.

Let’s take a trip back in time, starting with the 1920s.  From Burton Folsom’s book, New Deal or Raw Deal?:

In 1921, President Harding asked the sixty-five-year-old [Andrew] Mellon to be secretary of the treasury; the national debt [resulting from WWI] had surpassed $20 billion and unemployment had reached 11.7 percent, one of the highest rates in U.S. history.  Harding invited Mellon to tinker with tax rates to encourage investment without incurring more debt. Mellon studied the problem carefully; his solution was what is today called “supply side economics,” the idea of cutting taxes to stimulate investment.  High income tax rates, Mellon argued, “inevitably put pressure upon the taxpayer to withdraw this capital from productive business and invest it in tax-exempt securities. . . . The result is that the sources of taxation are drying up, wealth is failing to carry its share of the tax burden; and capital is being diverted into channels which yield neither revenue to the Government nor profit to the people” (page 128).

Mellon wrote, “It seems difficult for some to understand that high rates of taxation do not necessarily mean large revenue to the Government, and that more revenue may often be obtained by lower taxes.”  And he compared the government setting tax rates on incomes to a businessman setting prices on products: “If a price is fixed too high, sales drop off and with them profits.”

And what happened?

“As secretary of the treasury, Mellon promoted, and Harding and Coolidge backed, a plan that eventually cut taxes on large incomes from 73 to 24 percent and on smaller incomes from 4 to 1/2 of 1 percent.  These tax cuts helped produce an outpouring of economic development – from air conditioning to refrigerators to zippers, Scotch tape to radios and talking movies.  Investors took more risks when they were allowed to keep more of their gains.  President Coolidge, during his six years in office, averaged only 3.3 percent unemployment and 1 percent inflation – the lowest misery index of any president in the twentieth century.

Furthermore, Mellon was also vindicated in his astonishing predictions that cutting taxes across the board would generate more revenue.  In the early 1920s, when the highest tax rate was 73 percent, the total income tax revenue to the U.S. government was a little over $700 million.  In 1928 and 1929, when the top tax rate was slashed to 25 and 24 percent, the total revenue topped the $1 billion mark.  Also remarkable, as Table 3 indicates, is that the burden of paying these taxes fell increasingly upon the wealthy” (page 129-130).

Now, that is incredible upon its face, but it becomes even more incredible when contrasted with FDR’s antibusiness and confiscatory tax policies, which both dramatically shrunk in terms of actual income tax revenues (from $1.096 billion in 1929 to $527 million in 1935), and dramatically shifted the tax burden to the backs of the poor by imposing huge new excise taxes (from $540 million in 1929 to $1.364 billion in 1935).  See Table 1 on page 125 of New Deal or Raw Deal for that information.

FDR both collected far less taxes from the rich, while imposing a far more onerous tax burden upon the poor.

It is simply a matter of empirical fact that tax cuts create increased revenue, and that those [Democrats] who have refused to pay attention to that fact have ended up reducing government revenues even as they increased the burdens on the poorest whom they falsely claim to help.

Let’s move on to John F. Kennedy, one of the most popular Democrat presidents ever.  Few realize that he was also a supply-side tax cutter.

Kennedy said:

“It is a paradoxical truth that tax rates are too high and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now … Cutting taxes now is not to incur a budget deficit, but to achieve the more prosperous, expanding economy which can bring a budget surplus.”

– John F. Kennedy, Nov. 20, 1962, president’s news conference


“Lower rates of taxation will stimulate economic activity and so raise the levels of personal and corporate income as to yield within a few years an increased – not a reduced – flow of revenues to the federal government.”

– John F. Kennedy, Jan. 17, 1963, annual budget message to the Congress, fiscal year 1964

“In today’s economy, fiscal prudence and responsibility call for tax reduction even if it temporarily enlarges the federal deficit – why reducing taxes is the best way open to us to increase revenues.”

– John F. Kennedy, Jan. 21, 1963, annual message to the Congress: “The Economic Report Of The President”


“It is no contradiction – the most important single thing we can do to stimulate investment in today’s economy is to raise consumption by major reduction of individual income tax rates.”

– John F. Kennedy, Jan. 21, 1963, annual message to the Congress: “The Economic Report Of The President”


“Our tax system still siphons out of the private economy too large a share of personal and business purchasing power and reduces the incentive for risk, investment and effort – thereby aborting our recoveries and stifling our national growth rate.”

– John F. Kennedy, Jan. 24, 1963, message to Congress on tax reduction and reform, House Doc. 43, 88th Congress, 1st Session.


“A tax cut means higher family income and higher business profits and a balanced federal budget. Every taxpayer and his family will have more money left over after taxes for a new car, a new home, new conveniences, education and investment. Every businessman can keep a higher percentage of his profits in his cash register or put it to work expanding or improving his business, and as the national income grows, the federal government will ultimately end up with more revenues.”

– John F. Kennedy, Sept. 18, 1963, radio and television address to the nation on tax-reduction bill

Which is to say that modern Democrats are essentially calling one of their greatest presidents a liar when they demonize tax cuts as a means of increasing government revenues.

So let’s move on to Ronald Reagan.  Reagan had two major tax cutting policies implemented: the Economic Recovery Tax Act (ERTA) of 1981, which was retroactive to 1981, and the Tax Reform Act of 1986.

Did Reagan’s tax cuts decrease federal revenues?  Hardly:

We find that 8 of the following 10 years there was a surplus of revenue from 1980, prior to the Reagan tax cuts.  And, following the Tax Reform Act of 1986, there was a MASSIVE INCREASEof revenue.

So Reagan’s tax cuts increased revenue.  But who paid the increased tax revenue?  The poor?  Opponents of the Reagan tax cuts argued that his policy was a giveaway to the rich (ever heard that one before?) because their tax payments would fall.  But that was exactly wrong.  In reality:

“The share of the income tax burden borne by the top 10 percent of taxpayers increased from 48.0 percent in 1981 to 57.2 percent in 1988. Meanwhile, the share of income taxes paid by the bottom 50 percent of taxpayers dropped from 7.5 percent in 1981 to 5.7 percent in 1988.”

So Ronald Reagan a) collected more total revenue, b) collected more revenue from the rich, while c) reducing revenue collected by the bottom half of taxpayers, and d) generated an economic powerhouse that lasted – with only minor hiccups – for nearly three decades.  Pretty good achievement considering that his predecessor was forced to describe his own economy as a “malaise,” suffering due to a “crisis of confidence.” Pretty good considering that President Jimmy Carter responded to a reporter’s question as to what he would do about the problem of inflation by answering, “It would be misleading for me to tell any of you that there is a solution to it.”

Reagan whipped inflation.  Just as he whipped that malaise and that crisis of confidence.

________

The Laffer Curve, Part III: Dynamic Scoring

Musk invokes Milton Friedman in condemnation of Biden spending bill ‘trickery’ Milton Friedman: “Nothing is so permanent as a temporary government program”

______________________________________

Musk invokes Milton Friedman in condemnation of Biden spending bill ‘trickery’

Loading video

Tesla founder Elon Musk blasted the “trickery” of President Joe Biden’s spending bill, channeling preeminent free-market economist Milton Friedman.

Musk, the world’s wealthiest person, posted an analysis of the Democratic spending legislation that found that by 2050, the national debt would increase by nearly 25%and gross domestic product would fall by nearly 3% should the plan be implemented with certain temporary provisions made permanent.

“There is a lot of accounting trickery in this bill that isn’t being disclosed to the public,” Musk told his 66 million Twitter followers on Wednesday.

“Nothing is more permanent than a ‘temporary’ government program,” the billionaire added, which is an almost exact word-for-word quote from Friedman, who is known for being a major proponent of free-market capitalism and one of the leaders of the Chicago school of economics.

MUSK SLAMS FEDERAL SUBSIDIES FOR ELECTRIC VEHICLES

The Democratic bill, which many in the party claim is fully paid for, is chock-full of spending provisions that have early sunsets and drive down the headline price of the agenda, a tactic that Republicans and certain outside groups have characterized as gimmickry. Should the legislation pass, Democrats would likely seek to make those early sunsets permanent, thus increasing the bill’s actual cost by a large margin.

“In an alternative, illustrative scenario in which all temporary provisions in [the package] are made permanent, spending would instead total $4.6 trillion over the 10-year budget window,” the report reads. “In this scenario, by 2050 federal debt increase by 24.4 percent and GDP would fall by 2.9 percent relative to current law.”

This week, Musk also addressed the Democratic spending legislation during an interview with the Wall Street Journal. Musk said he thinks it might be better if the legislation doesn’t end up getting passed and cited the ballooning federal deficit.

During the interview, Musk said he is not an “extreme libertarian” but does think that the United States should minimize the role of the government. Musk also bucked the notion of federal subsidies, even for the electric vehicles that his company is known for.

CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER

“It does not make sense to take the job of capital allocation away from people who have demonstrated great skill at capital allocation and give it to an entity that has demonstrated very poor skill in capital allocation, which is the government,” Musk said, invoking libertarian ideals.

“The government is simply the biggest corporation, with a monopoly on violence, and where you have no recourse,” he said, referencing renowned sociologist Max Weber.

Milton Friedman On Charlie Rose (Part One)

The late Milton Friedman discusses economics and otherwise with Charlie Rose.

_________________________________________

Milton Friedman: Life and ideas – Part 01

Milton Friedman: Life and ideas

A brief biography of Milton Friedman

_____________________________________

Stossel – “Free to Choose” (Milton Friedman) 1/6

6-10-10. pt.1 of 6. Stossel discusses Milton Friedman’s 1980 book, “Free to Choose”, which was smuggled in and read widely in Eastern Europe during the Cold War by many countries under Soviet rule. Read and admired the world over by the likes of Margaret Thatcher and Ronald Reagan, this book served as the inspiration for many of the Soviet sattellite countries’ economies once they achieved freedom after the fall of the Soviet Union.

_________________________________________

Milton Friedman on Medical Care [1/6]

Milton Friedman and Ronald Reagan  were two of my heroes and I know that you can learn a great deal from their lives and their economic philosophies.  I suggest checking out these episodes of Milton Friedman’s film series FREE TO CHOOSE: “The Failure of Socialism” and “What is wrong with our schools?”  and “Created Equal”  and  From Cradle to Grave, and – Power of the Market.

What’s the Half-Life of a “Temporary” Tax Increase?

July 1, 2013 by Dan Mitchell

Milton Friedman famously noted that, “Nothing is so permanent as a temporary government program”and Ronald Reagan sagely observed that “a government bureau is the nearest thing to eternal life we’ll ever see on this earth.”

Two great Americans

They’re both right, but they should have included the other half of the fiscal equation. Repealing a tax, even a “temporary tax,” is just as difficult as getting rid of wasteful spending.

Simply stated, once politicians get access to a source of additional revenue, it’s feeding time at the zoo and good luck getting them to give the money back. Here’s a sobering example from Philadelphia.

Skeptics say there’s no such thing as a “temporary” tax. Like the two-year property tax increase City Council passed in 2010 that, lo and behold, is still with us. Or another dreaded levy: the wage tax. It was passed in 1939 as a short-term fix for the city’s finances, but succeeding generations have nonetheless been forced to accept its bite in their paychecks. The latest tax under consideration for immortality is the 1 percent sales-tax increase the state allowed Philadelphia to impose in 2009 as a bridge through the recession.The increase – which raised the tax on most goods and services in Philadelphia from 7 percent to 8 percent – is slated to expire next June. City and state leaders are now talking about making the increase permanent, with the extra money being put toward one or both of the city’s greatest needs: the struggling School District and the vastly underfunded public employee pension fund.

The bulk of that excerpt is a straightforward recitation of how temporary tax hikes become permanent tax hikes, but I have to object to the final sentence. The “city’s greatest needs” are replacing the failed government education monopoly with school choice and reducing the excessive pensions for over-compensated government bureaucrats – such as the city’s former “managing director” (whatever that is), Camille Cates Barnett.

I also can’t resist commenting on the craven behavior of the city’s Chamber of Commerce. I though the national Chamber of Commerce was bad when it endorsed TARP and the faux stimulus, but the local Chamber may be even worse.

Joe Grace, director of public policy at the Greater Philadelphia Chamber of Commerce, said, “We have not seen any evidence that extending the 1 percent is going to have any negative impact on the local businesses.” The chamber is also backing a $2-a-pack cigarette tax dedicated to the schools. “Our belief is the School District needs resources,” Grace said. “We’re working, along with many others, to close the school-funding gap, really by any means necessary.”

So Mr. Grace thinks more funding for a failed education bureaucracy should be achieved by “any means necessary.” Well, I think a 100 percent tax rate on Mr. Grace should be at the top of the list.

Heck, if France can tax at 100 percent, then so can the City of Philadelphia, and Mr. Grace is a deserving recipient of such a levy.

But there are some opponents of the tax, though they’re not exactly libertarian heroes.

…members of the nearly all-Democratic Philadelphia delegation have raised concerns about using the 1 percent to help fund the schools because it lets the state off the hook for its share of education funding. Danilo Burgos, president of the Dominican Grocers Association, argued that giving sales-tax revenue to the schools was “a Band-Aid.” The state, which has control of the city’s schools, should be responsible for devising “a real solution for our schools.”

In other words, they want more money to waste, but they want to take it from people in the rest of the state.

Sort of reminds me of what the great Frederic Bastiat wrote more than 150 years ago, “The state is that great fiction by which everyone tries to live at the expense of everyone else.”

But if enough people act as if that fiction is reality, then you get too many people riding in the wagon and not enough people pulling the wagon. That’s a good description of what’s happening in places such as Philadelphia and Greece.

Related posts:Milton Friedman’s “Free to Choose” film transcripts and videos here on http://www.thedailyhatch.org

I have many posts on my blog that include both the transcript and videos of Milton Friedman’s film series “Free to Choose” and here are the episodes that I have posted.

_____________

Here are the posts and you can find the links in order below this.

The Power of the Market from 1990

The Failure of Socialism from 1990

The Anatomy of a Crisis from 1980

What is wrong with our schools?  from 1980

Created Equal from 1980

From Cradle to Grave from 1980

The Power of the Market 1980

Debate on Inflation from 1980

Milton Friedman is the short one!!!

Milton Friedman’s Free to Choose (1980), episode 3 – Anatomy of a Crisis. part 1

“The Power of the Market” episode of Free to Choose in 1990 by Milton Friedman (Part 5)

Milton Friedman The Power of the Market 5-5 How can we have personal freedom without economic freedom? That is why I don’t understand why socialists who value individual freedoms want to take away our economic freedoms.  I wanted to share this info below with you from Milton Friedman who has influenced me greatly over the […]

“The Power of the Market” episode of Free to Choose in 1990 by Milton Friedman (Part 4)

Milton Friedman The Power of the Market 4-5 How can we have personal freedom without economic freedom? That is why I don’t understand why socialists who value individual freedoms want to take away our economic freedoms.  I wanted to share this info below with you from Milton Friedman who has influenced me greatly over the […]

“The Power of the Market” episode of Free to Choose in 1990 by Milton Friedman (Part 3)

Milton Friedman The Power of the Market 3-5 How can we have personal freedom without economic freedom? That is why I don’t understand why socialists who value individual freedoms want to take away our economic freedoms.  I wanted to share this info below with you from Milton Friedman who has influenced me greatly over the […]

“The Power of the Market” episode of Free to Choose in 1990 by Milton Friedman (Part 2)

Milton Friedman The Power of the Market 2-5 How can we have personal freedom without economic freedom? That is why I don’t understand why socialists who value individual freedoms want to take away our economic freedoms.  I wanted to share this info below with you from Milton Friedman who has influenced me greatly over the […]

“The Power of the Market” episode of Free to Choose in 1990 by Milton Friedman (Part 1)

Milton Friedman The Power of the Market 1-5 How can we have personal freedom without economic freedom? That is why I don’t understand why socialists who value individual freedoms want to take away our economic freedoms.  I wanted to share this info below with you from Milton Friedman who has influenced me greatly over the […]

Milton Friedman’s Free to Choose (1980), episode 3 – Anatomy of a Crisis. part 1

“Friedman Friday” EPISODE “The Failure of Socialism” of Free to Choose in 1990 by Milton Friedman (Part 5)

Milton Friedman: Free To Choose – The Failure Of Socialism With Ronald Reagan (Full) Published on Mar 19, 2012 by NoNationalityNeeded Milton Friedman’s writings affected me greatly when I first discovered them and I wanted to share with you. Abstract: Ronald Reagan introduces this program, and traces a line from Adam Smith’s “The Wealth of […]

“Friedman Friday” EPISODE “The Failure of Socialism” of Free to Choose in 1990 by Milton Friedman (Part 4)

Milton Friedman: Free To Choose – The Failure Of Socialism With Ronald Reagan (Full) Published on Mar 19, 2012 by NoNationalityNeeded Milton Friedman’s writings affected me greatly when I first discovered them and I wanted to share with you. Abstract: Ronald Reagan introduces this program, and traces a line from Adam Smith’s “The Wealth of […]

“Friedman Friday” EPISODE “The Failure of Socialism” of Free to Choose in 1990 by Milton Friedman (Part 3)

Milton Friedman: Free To Choose – The Failure Of Socialism With Ronald Reagan (Full) Published on Mar 19, 2012 by NoNationalityNeeded Milton Friedman’s writings affected me greatly when I first discovered them and I wanted to share with you. Abstract: Ronald Reagan introduces this program, and traces a line from Adam Smith’s “The Wealth of […]

“Friedman Friday” EPISODE “The Failure of Socialism” of Free to Choose in 1990 by Milton Friedman (Part 2)

Milton Friedman: Free To Choose – The Failure Of Socialism With Ronald Reagan (Full) Published on Mar 19, 2012 by NoNationalityNeeded Milton Friedman’s writings affected me greatly when I first discovered them and I wanted to share with you. Abstract: Ronald Reagan introduces this program, and traces a line from Adam Smith’s “The Wealth of […]

“Friedman Friday,” EPISODE “The Failure of Socialism” of Free to Choose in 1990 by Milton Friedman (Part 1)

Milton Friedman: Free To Choose – The Failure Of Socialism With Ronald Reagan (Full) Published on Mar 19, 2012 by NoNationalityNeeded Milton Friedman’s writings affected me greatly when I first discovered them and I wanted to share with you. We must not head down the path of socialism like Greece has done. Abstract: Ronald Reagan […]

________________

“Friedman Friday” (“Free to Choose” episode 3 – Anatomy of a Crisis. part 7of 7)

TEMIN: We don’t think the big capital arose before the government did? VON HOFFMAN: Listen, what are we doing here? I mean __ defending big government is like defending death and taxes. When was the last time you met anybody that was in favor of big government? FRIEDMAN: Today, today I met Bob Lekachman, I […]

By Everette Hatcher III | Also posted in Current Events | Edit | Comments (0)

“Friedman Friday” (“Free to Choose” episode 3 – Anatomy of a Crisis. part 6of 7)

worked pretty well for a whole generation. Now anything that works well for a whole generation isn’t entirely bad. From the fact __ from that fact, and the undeniable fact that things are working poorly now, are we to conclude that the Keynesian sort of mixed regulation was wrong __ FRIEDMAN: Yes. LEKACHMAN: __ or […]

By Everette Hatcher III | Also posted in Current Events | Edit | Comments (0)

“Friedman Friday” (“Free to Choose” episode 3 – Anatomy of a Crisis. part 5 of 7)

MCKENZIE: Ah, well, that’s not on our agenda actually. (Laughter) VOICE OFF SCREEN: Why not? MCKENZIE: I boldly repeat the question, though, the expectation having been __ having been raised in the public mind, can you reverse this process where government is expected to produce the happy result? LEKACHMAN: Oh, no way. And it would […]

By Everette Hatcher III | Also posted in Current Events | Edit | Comments (0)

“Friedman Friday” (“Free to Choose” episode 3 – Anatomy of a Crisis. part 4 of 7)

The massive growth of central government that started after the depression has continued ever since. If anything, it has even speeded up in recent years. Each year there are more buildings in Washington occupied by more bureaucrats administering more laws. The Great Depression persuaded the public that private enterprise was a fundamentally unstable system. That […]

By Everette Hatcher III | Also posted in Current Events | Edit | Comments (0)

“Friedman Friday” (“Free to Choose” episode 3 – Anatomy of a Crisis. part 3 of 7)

Worse still, America’s depression was to become worldwide because of what lies behind these doors. This is the vault of the Federal Reserve Bank of New York. Inside is the largest horde of gold in the world. Because the world was on a gold standard in 1929, these vaults, where the U.S. gold was stored, […]

By Everette Hatcher III | Also posted in Current Events | Edit | Comments (0)

“Friedman Friday” (Part 16) (“Free to Choose” episode 3 – Anatomy of a Crisis. part 2 of 7)

  George Eccles: Well, then we called all our employees together. And we told them to be at the bank at their place at 8:00 a.m. and just act as if nothing was happening, just have a smile on their face, if they could, and me too. And we have four savings windows and we […]

By Everette Hatcher III | Also posted in Current Events | Edit | Comments (0)

“Friedman Friday” (“Free to Choose” episode 3 – Anatomy of a Crisis. part 1of 7)

Milton Friedman’s Free to Choose (1980), episode 3 – Anatomy of a Crisis. part 1 FREE TO CHOOSE: Anatomy of Crisis Friedman Delancy Street in New York’s lower east side, hardly one of the city’s best known sites, yet what happened in this street nearly 50 years ago continues to effect all of us today. […]

By Everette Hatcher III | Also posted in Current Events | Edit | Comments (0)

____________________________

_____________


________________________________________________

_____________________________________________

Friedman Friday” Free to Choose by Milton Friedman: Episode “What is wrong with our schools?” (Part 6 of transcript and video)

Here is the video clip and transcript of the film series FREE TO CHOOSE episode “What is wrong with our schools?” Part 6 of 6.   Volume 6 – What’s Wrong with our Schools Transcript: FRIEDMAN: But I personally think it’s a good thing. But I don’t see that any reason whatsoever why I shouldn’t have been required […]

By Everette Hatcher III | Also posted in Vouchers | Edit | Comments (0)

Friedman Friday” Free to Choose by Milton Friedman: Episode “What is wrong with our schools?” (Part 5 of transcript and video)

Here is the video clip and transcript of the film series FREE TO CHOOSE episode “What is wrong with our schools?” Part 5 of 6.   Volume 6 – What’s Wrong with our Schools Transcript: Are your voucher schools  going to accept these tough children? COONS: You bet they are. (Several talking at once.) COONS: May I answer […]

By Everette Hatcher III | Also posted in Vouchers | Edit | Comments (0)

Free to Choose by Milton Friedman: Episode “What is wrong with our schools?” (Part 4 of transcript and video)

Here is the video clip and transcript of the film series FREE TO CHOOSE episode “What is wrong with our schools?” Part 4 of 6.   Volume 6 – What’s Wrong with our Schools Transcript: It seems to me that if one is truly interested in liberty, which I think is the ultimate value that Milton Friedman talks […]

By Everette Hatcher III | Also posted in Vouchers | Edit | Comments (0)

Friedman Friday” Free to Choose by Milton Friedman: Episode “What is wrong with our schools?” (Part 3 of transcript and video)

Friedman Friday” Free to Choose by Milton Friedman: Episode “What is wrong with our schools?” (Part 3 of transcript and video) Here is the video clip and transcript of the film series FREE TO CHOOSE episode “What is wrong with our schools?” Part 3 of 6.   Volume 6 – What’s Wrong with our Schools Transcript: If it […]

Friedman Friday” Free to Choose by Milton Friedman: Episode “What is wrong with our schools?” (Part 2 of transcript and video)

Here is the video clip and transcript of the film series FREE TO CHOOSE episode “What is wrong with our schools?” Part 2 of 6.   Volume 6 – What’s Wrong with our Schools Transcript: Groups of concerned parents and teachers decided to do something about it. They used private funds to take over empty stores and they […]

By Everette Hatcher III | Also posted in Vouchers | Edit | Comments (1)

Friedman Friday” Free to Choose by Milton Friedman: Episode “What is wrong with our schools?” (Part 1 of transcript and video)

Here is the video clip and transcript of the film series FREE TO CHOOSE episode “What is wrong with our schools?” Part 1 of 6.   Volume 6 – What’s Wrong with our Schools Transcript: Friedman: These youngsters are beginning another day at one of America’s public schools, Hyde Park High School in Boston. What happens when […]

By Everette Hatcher III | Also posted in Vouchers | Tagged  | Edit | Comments (0)

Free to Choose by Milton Friedman: Episode “Created Equal” (Part 7 of transcript and video)

Liberals like President Obama want to shoot for an equality of outcome. That system does not work. In fact, our free society allows for the closest gap between the wealthy and the poor. Unlike other countries where free enterprise and other freedoms are not present.  This is a seven part series. Created Equal [7/7]. Milton Friedman’s Free to Choose […]

Free to Choose by Milton Friedman: Episode “Created Equal” (Part 6 of transcript and video)

Liberals like President Obama want to shoot for an equality of outcome. That system does not work. In fact, our free society allows for the closest gap between the wealthy and the poor. Unlike other countries where free enterprise and other freedoms are not present.  This is a seven part series. Created Equal [6/7]. Milton Friedman’s Free to Choose […]

“Friedman Friday” Free to Choose by Milton Friedman: Episode “Created Equal” (Part 5 of transcript and video)

Liberals like President Obama want to shoot for an equality of outcome. That system does not work. In fact, our free society allows for the closest gap between the wealthy and the poor. Unlike other countries where free enterprise and other freedoms are not present.  This is a seven part series. Created Equal [5/7]. Milton Friedman’s Free to Choose […]

Free to Choose by Milton Friedman: Episode “Created Equal” (Part 4 of transcript and video)

Liberals like President Obama want to shoot for an equality of outcome. That system does not work. In fact, our free society allows for the closest gap between the wealthy and the poor. Unlike other countries where free enterprise and other freedoms are not present.  This is a seven part series. Created Equal [4/7]. Milton Friedman’s Free to Choose […]

Friedman Friday” Free to Choose by Milton Friedman: Episode “Created Equal” (Part 3 of transcript and video)

Friedman Friday” Free to Choose by Milton Friedman: Episode “Created Equal” (Part 3 of transcript and video) Liberals like President Obama want to shoot for an equality of outcome. That system does not work. In fact, our free society allows for the closest gap between the wealthy and the poor. Unlike other countries where free enterprise and other […]

Free to Choose by Milton Friedman: Episode “Created Equal” (Part 2 of transcript and video)

Free to Choose by Milton Friedman: Episode “Created Equal” (Part 2 of transcript and video) Liberals like President Obama want to shoot for an equality of outcome. That system does not work. In fact, our free society allows for the closest gap between the wealthy and the poor. Unlike other countries where free enterprise and other freedoms are […]

Free to Choose by Milton Friedman: Episode “Created Equal” (Part 1 of transcript and video)

 Milton Friedman and Ronald Reagan Liberals like President Obama (and John Brummett) want to shoot for an equality of outcome. That system does not work. In fact, our free society allows for the closest gap between the wealthy and the poor. Unlike other countries where free enterprise and other freedoms are not present.  This is a seven part series. […]

Milton Friedman The Power of the Market 2-5

Milton Friedman Friday:(“Free to Choose” episode 4 – From Cradle to Grave, Part 7 of 7)

I am currently going through his film series “Free to Choose” which is one the most powerful film series I have ever seen. TEMIN: We don’t think the big capital arose before the government did? VON HOFFMAN: Listen, what are we doing here? I mean __ defending big government is like defending death and taxes. […]

Milton Friedman Friday:(“Free to Choose” episode 4 – From Cradle to Grave, Part 6 of 7)

I am currently going through his film series “Free to Choose” which is one the most powerful film series I have ever seen worked pretty well for a whole generation. Now anything that works well for a whole generation isn’t entirely bad. From the fact __ from that fact, and the undeniable fact that things […]

Milton Friedman Friday:(“Free to Choose” episode 4 – From Cradle to Grave, Part 5 of 7)

 I am currently going through his film series “Free to Choose” which is one the most powerful film series I have ever seen. PART 5 of 7 MCKENZIE: Ah, well, that’s not on our agenda actually. (Laughter) VOICE OFF SCREEN: Why not? MCKENZIE: I boldly repeat the question, though, the expectation having been __ having […]

Milton Friedman Friday: (“Free to Choose” episode 4 – From Cradle to Grave, Part 4 of 7)

 I am currently going through his film series “Free to Choose” which is one the most powerful film series I have ever seen. PART 4 of 7 The massive growth of central government that started after the depression has continued ever since. If anything, it has even speeded up in recent years. Each year there […]

By Everette Hatcher III | Edit | Comments (0)

Milton Friedman Friday: (“Free to Choose” episode 4 – From Cradle to Grave, Part 3 of 7)

 I am currently going through his film series “Free to Choose” which is one the most powerful film series I have ever seen. PART 3 OF 7 Worse still, America’s depression was to become worldwide because of what lies behind these doors. This is the vault of the Federal Reserve Bank of New York. Inside […]

By Everette Hatcher III | Edit | Comments (0)

Milton Friedman Friday:(“Free to Choose” episode 4 – From Cradle to Grave, Part 2 of 7)

 I am currently going through his film series “Free to Choose” which is one the most powerful film series I have ever seen. For the past 7 years Maureen Ramsey has had to buy food and clothes for her family out of a government handout. For the whole of that time, her husband, Steve, hasn’t […]

Friedman Friday:(“Free to Choose” episode 4 – From Cradle to Grave, Part 1 of 7)

Friedman Friday:(“Free to Choose” episode 4 – From Cradle to Grave, Part 1 of 7) Volume 4 – From Cradle to Grave Abstract: Since the Depression years of the 1930s, there has been almost continuous expansion of governmental efforts to provide for people’s welfare. First, there was a tremendous expansion of public works. The Social Security Act […]

By Everette Hatcher III | Edit | Comments (0)

“Friedman Friday” (“Free to Choose” episode 1 – Power of the Market. part 7 of 7)

  Michael Harrington:  If you don’t have the expertise, the knowledge technology today, you’re out of the debate. And I think that we have to democratize information and government as well as the economy and society. FRIEDMAN: I am sorry to say Michael Harrington’s solution is not a solution to it. He wants minority rule, I […]

“Friedman Friday” (“Free to Choose” episode 1 – Power of the Market. part 6 of 7)

PETERSON: Well, let me ask you how you would cope with this problem, Dr. Friedman. The people decided that they wanted cool air, and there was tremendous need, and so we built a huge industry, the air conditioning industry, hundreds of thousands of jobs, tremendous earnings opportunities and nearly all of us now have air […]

“Friedman Friday” (“Free to Choose” episode 1 – Power of the Market. part 5 of 7)

Part 5 Milton Friedman: I do not believe it’s proper to put the situation in terms of industrialist versus government. On the contrary, one of the reasons why I am in favor of less government is because when you have more government industrialists take it over, and the two together form a coalition against the ordinary […]

“Friedman Friday” (“Free to Choose” episode 1 – Power of the Market. part 4 of 7)

The fundamental principal of the free society is voluntary cooperation. The economic market, buying and selling, is one example. But it’s only one example. Voluntary cooperation is far broader than that. To take an example that at first sight seems about as far away as you can get __ the language we speak; the words […]

“Friedman Friday” (“Free to Choose” episode 1 – Power of the Market. part 3 of 7)

  _________________________   Pt3  Nowadays there’s a considerable amount of traffic at this border. People cross a little more freely than they use to. Many people from Hong Kong trade in China and the market has helped bring the two countries closer together, but the barriers between them are still very real. On this side […]

“Friedman Friday” (“Free to Choose” episode 1 – Power of the Market. part 2 of 7)

  Aside from its harbor, the only other important resource of Hong Kong is people __ over 4_ million of them. Like America a century ago, Hong Kong in the past few decades has been a haven for people who sought the freedom to make the most of their own abilities. Many of them are […]

“Friedman Friday” (“Free to Choose” episode 1 – Power of the Market. part 1of 7)

“FREE TO CHOOSE” 1: The Power of the Market (Milton Friedman) Free to Choose ^ | 1980 | Milton Friedman Posted on Monday, July 17, 2006 4:20:46 PM by Choose Ye This Day FREE TO CHOOSE: The Power of the Market Friedman: Once all of this was a swamp, covered with forest. The Canarce Indians […]

By Everette Hatcher III | Posted in Current EventsMilton Friedman | Edit | Comments (0)

Milton Friedman The Power of the Market 1-5

Debate on Milton Friedman’s cure for inflation

If you would like to see the first three episodes on inflation in Milton Friedman’s film series “Free to Choose” then go to a previous post I did. Ep. 9 – How to Cure Inflation [4/7]. Milton Friedman’s Free to Choose (1980) Uploaded by investbligurucom on Jun 16, 2010 While many people have a fairly […]

By Everette Hatcher III | Also posted in Current Events | Tagged  | Edit | Comments (0)

“Friedman Friday” Milton Friedman believed in liberty (Interview by Charlie Rose of Milton Friedman part 1)

Charlie Rose interview of Milton Friedman My favorite economist: Milton Friedman : A Great Champion of Liberty  by V. Sundaram   Milton Friedman, the Nobel Prize-winning economist who advocated an unfettered free market and had the ear of three US Presidents – Nixon, Ford and Reagan – died last Thursday (16 November, 2006 ) in San Francisco […]

What were the main proposals of Milton Friedman?

Stearns Speaks on House Floor in Support of Balanced Budget Amendment Uploaded by RepCliffStearns on Nov 18, 2011 Speaking on House floor in support of Balanced Budget Resolution, 11/18/2011 ___________ Below are some of the main proposals of Milton Friedman. I highly respected his work. David J. Theroux said this about Milton Friedman’s view concerning […]

“Friedman Friday,” EPISODE “The Failure of Socialism” of Free to Choose in 1990 by Milton Friedman (Part 1)

Milton Friedman: Free To Choose – The Failure Of Socialism With Ronald Reagan (Full) Published on Mar 19, 2012 by NoNationalityNeeded Milton Friedman’s writings affected me greatly when I first discovered them and I wanted to share with you. We must not head down the path of socialism like Greece has done. Abstract: Ronald Reagan […]

Defending Milton Friedman

What a great defense of Milton Friedman!!!!   Defaming Milton Friedman by Johan Norberg This article appeared in Reason Online on September 26, 2008  PRINT PAGE  CITE THIS      Sans Serif      Serif Share with your friends: ShareThis In the future, if you tell a student or a journalist that you favor free markets and limited government, there is […]

Milton and Rose Friedman “Two Lucky People”

Milton Friedman on Hayek’s “Road to Serfdom” 1994 Interview 2 of 2 Uploaded by PenguinProseMedia on Oct 26, 2011 2nd half of 1994 interview. ________________ I have a lot of respect for the Friedmans.Two Lucky People by Milton and Rose Friedman reviewed by David Frum — October 1998. However, I liked this review below better. It […]

Video clip:Milton Friedman discusses his view of numerous political figures and policy issues in (Part 2)

Milton Friedman on Hayek’s “Road to Serfdom” 1994 Interview 1 of 2 Uploaded by PenguinProseMedia on Oct 25, 2011 Says Federal Reserve should be abolished, criticizes Keynes. One of Friedman’s best interviews, discussion spans Friedman’s career and his view of numerous political figures and public policy issues. ___________________ Here is a review of “Two Lucky People.” […]

Milton Friedman believed in liberty (Interview by Charlie Rose of Milton Friedman part 1)

Charlie Rose interview of Milton Friedman My favorite economist: Milton Friedman : A Great Champion of Liberty  by V. Sundaram   Milton Friedman, the Nobel Prize-winning economist who advocated an unfettered free market and had the ear of three US Presidents – Nixon, Ford and Reagan – died last Thursday (16 November, 2006 ) in San Francisco […]

“The Failure of Socialism” episode of Free to Choose in 1990 by Milton Friedman (Part 1)

Milton Friedman: Free To Choose – The Failure Of Socialism With Ronald Reagan (Full) Published on Mar 19, 2012 by NoNationalityNeeded Milton Friedman’s writings affected me greatly when I first discovered them and I wanted to share with you. We must not head down the path of socialism like Greece has done. Abstract: Ronald Reagan […]

Volume 1: Power of the Market Volume 2: The Tyranny of Control
Volume 3: Anatomy of a Crisis 
Volume 4: From Cradle to Grave
Volume 5: Created Equal
Volume 6: What’s Wrong With Our Schools?
Volume 7: Who Protects the Consumer?
Volume 8: Who Protects the Worker?
Volume 9: How to Cure Inflation
Volume 10: How to Stay Free

Updated 1990 Series:
Volume 1: The Power of the Market
Volume 2: The Tyranny of Control
Volume 3: Freedom & Prosperity
Volume 4: The Failure of Socialism
Volume 5: Created Equal

 

“Friedman Friday” Milton Friedman – Power of Choice (Biography) Part 3

Milton Friedman – Power of Choice (Biography) Part 3 Published on May 21, 2012 by BasicEconomics Tribute to Milton Friedman English Pages, 8. 9. 2008 Dear colleagues, dear friends, (1) It is a great honor for me to be asked to say a few words to this distinguished and very knowledgeable audience about one of our greatest […]

“Friedman Friday” Milton Friedman – Power of Choice (Biography) Part 2

Milton Friedman – Power of Choice (Biography) Part 2 Published on May 21, 2012 by BasicEconomics My Tribute to Milton Friedman: The Little Giant of Free Market Economics By: admin- 11/17/2006 09:49 AM RESIZE: AAA  Milton Friedman, the intellectual architect of the free-market reforms of the post-World War II era, was a dear friend. I […]

“Friedman Friday” Milton Friedman – Power of Choice – Biography (Part 1)

Milton Friedman – Power of Choice – Biography (Part 1) Published on May 20, 2012 by BasicEconomics   David R. Henderson The Pursuit of Happiness ~ Milton Friedman: A Personal Tribute May 2007 • Volume: 57 • Issue: 4 David Henderson (davidrhenderson1950@gmail.com) is a research fellow with the Hoover Institution and an economics professor at […]

Milton Friedman’s Chicago Boys started the Chilean Miracle and it is still helping ordinary people today!!!

Milton Friedman and Chile – The Power of Choice Uploaded on May 13, 2011 In this excerpt from Free To Choose Network’s “The Power of Choice (2006)”, we set the record straight on Milton Friedman’s dealings with Chile — including training the Chicago Boys and his meeting with Augusto Pinochet. Was the tremendous prosperity unleashed […]

Margaret Thatcher admired Milton Friedman

RARE Friedman Footage – On Keys to Reagan and Thatcher’s Success Margaret Thatcher and Milton Friedman were two of my heroes. Thatcher praises Friedman, her freedom fighter By George Jones, Political Editor 12:01AM GMT 17 Nov 2006 A tireless champion of the free market Let’s not get misty eyed over the Friedman legacy Milton Friedman, […]

Milton Friedman and Chile an update

Milton Friedman was a great economist and a fine speaker. ___________________ I have written before about Milton Friedman’s influence on the economy of Chile. Now I saw this fine article below fromhttp://www.heritage.org  and below that article I have included an article from the Wall Street Journal that talks about Milton Friedman’s influence on Chile. I […]

“Friedman Friday” Milton Friedman explains negative income tax to William F. Buckley in 1968

December 06, 2011 03:54 PM Milton Friedman Explains The Negative Income Tax – 1968 0 comments By Gordonskene enlarge Milton Friedman and friends.DOWNLOADS: 36 PLAYS: 35 Embed   The age-old question of Taxes. In the early 1960′s Economist Milton Friedman adopted an idea hatched in England in the 1950′s regarding a Negative Income Tax, to […]

Milton Friedman admired Margaret Thatcher

RARE Friedman Footage – On Keys to Reagan and Thatcher’s Success Margaret Thatcher and Milton Friedman were two of my heroes. Milton Friedman on How Francois Mitterrand (and Failed Lefty Economics) Helped Re-elect Margaret Thatcher Matt Welch|Apr. 10, 2013 9:37 am Yesterday I wrote a column about how Margaret Thatcher liberated Western Europe from the […]

Milton Friedman had a solution to today’s welfare mentality!!!

  I have written about the tremendous increase in the food stamp program the last 9 years before and that means that both President Obama and Bush were guilty of not trying to slow down it’s growth. Furthermore, Republicans have been some of the biggest supporters of the food stamp program. Milton Friedman had a […]

“Friedman Friday” Milton Friedman on “Firing Line” in 1968

Milton Friedman, Ronald Reagan And William F. Buckley Jr. Peter Robinson, 12.12.08, 12:01 AM EST In a time of crisis, don’t forget what they had to say. As the federal deficit surpasses $1 trillion, Congress debates a bailout for the Detroit automakers and President-elect Barack Obama draws up plans for a vast new stimulus package, […]

Dan Mitchell article: The Case for Capitalism, Part VI

[

The Case for Capitalism, Part VI

I have shared five videos (Part I, Part II, Part III, Part IV, and Part V) that make the case for capitalism.

Here’s a sixth example.

The video notes that poverty was the natural condition for humanity (notwithstanding the economic illiteracy of Congresswoman Pressley).

But then, starting a couple of hundred years ago, capitalism gained a foothold and – for the first time in world history – there were nations with mass prosperity.

We learn about how various places became rich, including the United States, Hong Kong, and New Zealand.

The narrator also pointed out that Ireland experienced a period of dramatic market-driven growth.

Which gives me a good excuse to make the following comparison, which shows the dramatic divergence between Ireland and Greece beginning in the mid-1980s.

Why the stunning divergence (one of many examples I’ve collected)?

Ireland controlled spending and cut tax rates and now routinely ranks among the nations with the most economic liberty.

Greece, by contrast, has imposed more and more government over time.

Let’s close with this tweet, which nicely summarizes Walter Williams’ famous observation.

P.S. This comparison of Sweden and Greece also makes the key point about the superiority of markets over statism.

P.P.S. Don Boudreaux and Deirdre McCloskey have must-watch videos on how capitalism enabled (some) nations to escape poverty.

The Best President in Recent History

Since I view Ronald Reagan as an honorary libertarian, I was very happy back in 2013 to see that he won a landslide victory over Barack Obama in a hypothetical poll.

This meant that voters either were old enough to personally experience the benefits of Reaganomics, or they managed to learn some history (in spite of a biased education establishment).

Well, now I have another reason to be happy. According to a new poll shared by Paul Bedard of the Washington Examiner, nearly 70 percent of respondents have a favorable impression of Reagan, easily the best result for all recent presidents.

Reagan also is disliked by the smallest percentage of respondents, a fact that almost surely irks some of my Reagan-hating friends.

And definitely irks Paul Krugman.

My two cents for today is that the current fight between Trumpism and establishment Republicanism is merely stylistic. If you crunch the numbers, you’ll see that both camps are big spenders.

I much prefer Reaganism.

Let’s wrap up with this cartoon strip that captures my sentiments.

P.S. Here’s an amusing story from Reagan about socialism (h/t: Don Boudreaux).

Not quite as good as this video, and it’s not even good enough to get added to this collection of Reagan videos, but it is a good description of why socialism is a failure.

P.S. There was one other president in the 20th century who deserves praise and applause.

Tax Cartels Mean Ever-Higher Tax Rates

When President Biden proposed a “global minimum tax” for businesses, I immediately warned that would lead to ever-increasing tax rates.

Ross Kaminsky of KHOW and I discussed how this is already happening.

I hate being right, but it’s always safe to predict that politicians and bureaucrats will embrace policies that give more power to government.

Especially when they are very anxious to stifle tax competition.

For decades, people in government have been upset that the tax cuts implemented by Ronald Reagan and Margaret Thatchertriggered a four-decade trend of lower tax rates and pro-growth tax reform.

That’s the reason Biden and his Treasury Secretary proposed a 15 percent minimum tax rate for businesses.

And it’s the reason they now want the rate to be even higher.

Though even I’m surprised that they’re already pushing for that outcome when the original pact hasn’t even been approved or implemented.

Here are some passages from a report by Reuters.

Treasury Secretary Janet Yellen will press G20 counterparts this week for a global minimum corporate tax rate above the 15% floor agreed by 130 countries last week…the global minimum tax rate…is tied to the outcome of legislation to raise the U.S. minimum tax rate, a Treasury official said.The Biden administration has proposed doubling the U.S. minimum tax on corporations overseas intangible income to 21% along with a new companion “enforcement” tax that would deny deductions to companies for tax payments to countries that fail to adopt the new global minimum rate. The officials said several countries were pushing for a rate above 15%, along with the United States.

Other kleptocratic governments naturally want the same thing.

A G7 proposal for a global minimum tax rate of 15% is too low and a rate of at least 21% is needed, Argentina’s finance minister said on Monday, leading a push by some developing countries… “The 15% rate is way too low,” Argentine Finance Minister Martin Guzman told an online panel hosted by the Independent Commission for the Reform of International Corporate Taxation. …”The minimum rate being proposed would not do much to countries in Africa…,” Mathew Gbonjubola, Nigeria’s tax policy director, told the same conference.

Needless to say, I’m not surprised that Argentina is on the wrong side.

And supporters of class warfare also are agitating for a higher minimum rate. Here are some excerpts from a column in the New York Times by Gabriel Zucman and Gus Wezerek.

In the decades after World War II, close to 50 percent of American companies’ earnings went to state and federal taxes. …it was a golden period. …President Biden should be applauded for trying to end the race to the bottom on corporate tax rates. But even if Congress approves the 15 percent global minimum corporate tax, it won’t be enough. …the Biden administration to give working families a real leg up, it should push Congress to enact a 25 percent minimum tax, which would bring in about $200 billion in additional revenue each year. …With a 25 percent minimum corporate tax, the Biden administration would begin to reverse decades of growing inequality. And it would encourage other countries to do the same, replacing a race to the bottom with a sprint to the top.

I can’t resist making two observations about this ideological screed.

  1. Even the IMF and OECD agree that the so-called race to the bottom has not led to a decline in corporate tax revenues, even when measured as a share of economic output.
  2. Since companies legally avoid rather than illegally evade taxes, the headline of the column is utterly dishonest – but it’s what we’ve learned to expect from the New York Times.

The only good thing about the Zucman-Wezerek column is that it includes this chart showing how corporate tax rates have dramatically declined since 1980.

P.S. For those interested, the horizontal line at the bottom is for Bermuda, though other jurisdictions (such as Monaco and the Cayman Islands) also deserve credit for having no corporate income taxes.

P.P.S. If you want to know why high corporate tax rates are misguided, click here. And if you want to know why Biden’s plan to raise the U.S. corporate tax rate is misguided, click here. Or here. Or here.

P.P.P.S. And if you want more information about why Biden’s global tax cartel is bad, click here, here, and here.

I enjoyed this article below because it demonstrates that the Laffer Curve has been working for almost 100 years now when it is put to the test in the USA. I actually got to hear Arthur Laffer speak in person in 1981 and he told us in advance what was going to happen the 1980’s and it all came about as he said it would when Ronald Reagan’s tax cuts took place. I wish we would lower taxes now instead of looking for more revenue through raised taxes. We have to grow the economy:

What Mitt Romney Said Last Night About Tax Cuts And The Deficit Was Absolutely Right. And What Obama Said Was Absolutely Wrong.

Mitt Romney repeatedly said last night that he would not allow tax cuts to add to the deficit.  He repeatedly said it because over and over again Obama blathered the liberal talking point that cutting taxes necessarily increased deficits.

Romney’s exact words: “I want to underline that — no tax cut that adds to the deficit.”

Meanwhile, Obama has promised to cut the deficit in half during his first four years – but instead gave America the highest deficits in the history of the entire human race.

I’ve written about this before.  Let’s replay what has happened every single time we’ve ever cut the income tax rate.

The fact of the matter is that we can go back to Calvin Coolidge who said very nearly THE EXACT SAME THING to his treasury secretary: he too would not allow any tax cuts that added to the debt.  Andrew Mellon – quite possibly the most brilliant economic mind of his day – did a great deal of research and determined what he believed was the best tax rate.  And the Coolidge administration DID cut income taxes and MASSIVELY increased revenues.  Coolidge and Mellon cut the income tax rate 67.12 percent (from 73 to 24 percent); and revenues not only did not go down, but they went UP by at least 42.86 percent (from $700 billion to over $1 billion).

That’s something called a documented fact.  But that wasn’t all that happened: another incredible thing was that the taxes and percentage of taxes paid actually went UP for the rich.  Because as they were allowed to keep more of the profits that they earned by investing in successful business, they significantly increased their investments and therefore paid more in taxes than they otherwise would have had they continued sheltering their money to protect themselves from the higher tax rates.  Liberals ignore reality, but it is simply true.  It is a fact.  It happened.

Then FDR came along and raised the tax rates again and the opposite happened: we collected less and less revenue while the burden of taxation fell increasingly on the poor and middle class again.  Which is exactly what Obama wants to do.

People don’t realize that John F. Kennedy, one of the greatest Democrat presidents, was a TAX CUTTER who believed the conservative economic philosophy that cutting tax rates would in fact increase tax revenues.  He too cut taxes, and he too increased tax revenues.

So we get to Ronald Reagan, who famously cut taxes.  And again, we find that Reagan cut that godawful liberal tax rate during an incredibly godawful liberal-caused economic recession, and he increased tax revenue by 20.71 percent (with revenues increasing from $956 billion to $1.154 trillion).  And again, the taxes were paid primarily by the rich:

“The share of the income tax burden borne by the top 10 percent of taxpayers increased from 48.0 percent in 1981 to 57.2 percent in 1988. Meanwhile, the share of income taxes paid by the bottom 50 percent of taxpayers dropped from 7.5 percent in 1981 to 5.7 percent in 1988.”

So we get to George Bush and the Bush tax cuts that liberals and in particular Obama have just demonized up one side and demagogued down the other.  And I can simply quote the New York Times AT the time:

Sharp Rise in Tax Revenue to Pare U.S. Deficit By EDMUND L. ANDREWS Published: July 13, 2005

WASHINGTON, July 12 – For the first time since President Bush took office, an unexpected leap in tax revenue is about to shrink the federal budget deficit this year, by nearly $100 billion.

A Jump in Corporate Payments On Wednesday, White House officials plan to announce that the deficit for the 2005 fiscal year, which ends in September, will be far smaller than the $427 billion they estimated in February.

Mr. Bush plans to hail the improvement at a cabinet meeting and to cite it as validation of his argument that tax cuts would stimulate the economy and ultimately help pay for themselves.

Based on revenue and spending data through June, the budget deficit for the first nine months of the fiscal year was $251 billion, $76 billion lower than the $327 billion gap recorded at the corresponding point a year earlier.

The Congressional Budget Office estimated last week that the deficit for the full fiscal year, which reached $412 billion in 2004, could be “significantly less than $350 billion, perhaps below $325 billion.”

The big surprise has been in tax revenue, which is running nearly 15 percent higher than in 2004. Corporate tax revenue has soared about 40 percent, after languishing for four years, and individual tax revenue is up as well
.

And of course the New York Times, as reliable liberals, use the adjective whenever something good happens under conservative policies and whenever something bad happens under liberal policies: ”unexpected.”   But it WASN’T ”unexpected.”  It was EXACTLY what Republicans had said would happen and in fact it was exactly what HAD IN FACT HAPPENED every single time we’ve EVER cut income tax rates.

The truth is that conservative tax policy has a perfect track record: every single time it has ever been tried, we have INCREASED tax revenues while not only exploding economic activity and creating more jobs, but encouraging the wealthy to pay more in taxes as well.  And liberals simply dishonestly refuse to acknowledge documented history.

Meanwhile, liberals also have a perfect record … of FAILUREThey keep raising taxes and keep not understanding why they don’t get the revenues they predicted.

The following is a section from my article, “Tax Cuts INCREASE Revenues; They Have ALWAYS Increased Revenues“, where I document every single thing I said above:

The Falsehood That Tax Cuts Increase The Deficit

Now let’s take a look at the utterly fallacious view that tax cuts in general create higher deficits.

Let’s take a trip back in time, starting with the 1920s.  From Burton Folsom’s book, New Deal or Raw Deal?:

In 1921, President Harding asked the sixty-five-year-old [Andrew] Mellon to be secretary of the treasury; the national debt [resulting from WWI] had surpassed $20 billion and unemployment had reached 11.7 percent, one of the highest rates in U.S. history.  Harding invited Mellon to tinker with tax rates to encourage investment without incurring more debt. Mellon studied the problem carefully; his solution was what is today called “supply side economics,” the idea of cutting taxes to stimulate investment.  High income tax rates, Mellon argued, “inevitably put pressure upon the taxpayer to withdraw this capital from productive business and invest it in tax-exempt securities. . . . The result is that the sources of taxation are drying up, wealth is failing to carry its share of the tax burden; and capital is being diverted into channels which yield neither revenue to the Government nor profit to the people” (page 128).

Mellon wrote, “It seems difficult for some to understand that high rates of taxation do not necessarily mean large revenue to the Government, and that more revenue may often be obtained by lower taxes.”  And he compared the government setting tax rates on incomes to a businessman setting prices on products: “If a price is fixed too high, sales drop off and with them profits.”

And what happened?

“As secretary of the treasury, Mellon promoted, and Harding and Coolidge backed, a plan that eventually cut taxes on large incomes from 73 to 24 percent and on smaller incomes from 4 to 1/2 of 1 percent.  These tax cuts helped produce an outpouring of economic development – from air conditioning to refrigerators to zippers, Scotch tape to radios and talking movies.  Investors took more risks when they were allowed to keep more of their gains.  President Coolidge, during his six years in office, averaged only 3.3 percent unemployment and 1 percent inflation – the lowest misery index of any president in the twentieth century.

Furthermore, Mellon was also vindicated in his astonishing predictions that cutting taxes across the board would generate more revenue.  In the early 1920s, when the highest tax rate was 73 percent, the total income tax revenue to the U.S. government was a little over $700 million.  In 1928 and 1929, when the top tax rate was slashed to 25 and 24 percent, the total revenue topped the $1 billion mark.  Also remarkable, as Table 3 indicates, is that the burden of paying these taxes fell increasingly upon the wealthy” (page 129-130).

Now, that is incredible upon its face, but it becomes even more incredible when contrasted with FDR’s antibusiness and confiscatory tax policies, which both dramatically shrunk in terms of actual income tax revenues (from $1.096 billion in 1929 to $527 million in 1935), and dramatically shifted the tax burden to the backs of the poor by imposing huge new excise taxes (from $540 million in 1929 to $1.364 billion in 1935).  See Table 1 on page 125 of New Deal or Raw Deal for that information.

FDR both collected far less taxes from the rich, while imposing a far more onerous tax burden upon the poor.

It is simply a matter of empirical fact that tax cuts create increased revenue, and that those [Democrats] who have refused to pay attention to that fact have ended up reducing government revenues even as they increased the burdens on the poorest whom they falsely claim to help.

Let’s move on to John F. Kennedy, one of the most popular Democrat presidents ever.  Few realize that he was also a supply-side tax cutter.

Kennedy said:

“It is a paradoxical truth that tax rates are too high and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now … Cutting taxes now is not to incur a budget deficit, but to achieve the more prosperous, expanding economy which can bring a budget surplus.”

– John F. Kennedy, Nov. 20, 1962, president’s news conference


“Lower rates of taxation will stimulate economic activity and so raise the levels of personal and corporate income as to yield within a few years an increased – not a reduced – flow of revenues to the federal government.”

– John F. Kennedy, Jan. 17, 1963, annual budget message to the Congress, fiscal year 1964

“In today’s economy, fiscal prudence and responsibility call for tax reduction even if it temporarily enlarges the federal deficit – why reducing taxes is the best way open to us to increase revenues.”

– John F. Kennedy, Jan. 21, 1963, annual message to the Congress: “The Economic Report Of The President”


“It is no contradiction – the most important single thing we can do to stimulate investment in today’s economy is to raise consumption by major reduction of individual income tax rates.”

– John F. Kennedy, Jan. 21, 1963, annual message to the Congress: “The Economic Report Of The President”


“Our tax system still siphons out of the private economy too large a share of personal and business purchasing power and reduces the incentive for risk, investment and effort – thereby aborting our recoveries and stifling our national growth rate.”

– John F. Kennedy, Jan. 24, 1963, message to Congress on tax reduction and reform, House Doc. 43, 88th Congress, 1st Session.


“A tax cut means higher family income and higher business profits and a balanced federal budget. Every taxpayer and his family will have more money left over after taxes for a new car, a new home, new conveniences, education and investment. Every businessman can keep a higher percentage of his profits in his cash register or put it to work expanding or improving his business, and as the national income grows, the federal government will ultimately end up with more revenues.”

– John F. Kennedy, Sept. 18, 1963, radio and television address to the nation on tax-reduction bill

Which is to say that modern Democrats are essentially calling one of their greatest presidents a liar when they demonize tax cuts as a means of increasing government revenues.

So let’s move on to Ronald Reagan.  Reagan had two major tax cutting policies implemented: the Economic Recovery Tax Act (ERTA) of 1981, which was retroactive to 1981, and the Tax Reform Act of 1986.

Did Reagan’s tax cuts decrease federal revenues?  Hardly:

We find that 8 of the following 10 years there was a surplus of revenue from 1980, prior to the Reagan tax cuts.  And, following the Tax Reform Act of 1986, there was a MASSIVE INCREASEof revenue.

So Reagan’s tax cuts increased revenue.  But who paid the increased tax revenue?  The poor?  Opponents of the Reagan tax cuts argued that his policy was a giveaway to the rich (ever heard that one before?) because their tax payments would fall.  But that was exactly wrong.  In reality:

“The share of the income tax burden borne by the top 10 percent of taxpayers increased from 48.0 percent in 1981 to 57.2 percent in 1988. Meanwhile, the share of income taxes paid by the bottom 50 percent of taxpayers dropped from 7.5 percent in 1981 to 5.7 percent in 1988.”

So Ronald Reagan a) collected more total revenue, b) collected more revenue from the rich, while c) reducing revenue collected by the bottom half of taxpayers, and d) generated an economic powerhouse that lasted – with only minor hiccups – for nearly three decades.  Pretty good achievement considering that his predecessor was forced to describe his own economy as a “malaise,” suffering due to a “crisis of confidence.” Pretty good considering that President Jimmy Carter responded to a reporter’s question as to what he would do about the problem of inflation by answering, “It would be misleading for me to tell any of you that there is a solution to it.”

Reagan whipped inflation.  Just as he whipped that malaise and that crisis of confidence.

________

The Laffer Curve, Part III: Dynamic Scoring

Dan Mitchell “According to a new poll shared by Paul Bedard of the Washington Examiner, nearly 70 percent of respondents have a favorable impression of Reagan, easily the best result for all recent presidents!”

[

The Best President in Recent History

Since I view Ronald Reagan as an honorary libertarian, I was very happy back in 2013 to see that he won a landslide victory over Barack Obama in a hypothetical poll.

This meant that voters either were old enough to personally experience the benefits of Reaganomics, or they managed to learn some history (in spite of a biased education establishment).

Well, now I have another reason to be happy. According to a new poll shared by Paul Bedard of the Washington Examiner, nearly 70 percent of respondents have a favorable impression of Reagan, easily the best result for all recent presidents.

Reagan also is disliked by the smallest percentage of respondents, a fact that almost surely irks some of my Reagan-hating friends.

And definitely irks Paul Krugman.

My two cents for today is that the current fight between Trumpism and establishment Republicanism is merely stylistic. If you crunch the numbers, you’ll see that both camps are big spenders.

I much prefer Reaganism.

Let’s wrap up with this cartoon strip that captures my sentiments.

P.S. Here’s an amusing story from Reagan about socialism (h/t: Don Boudreaux).

Not quite as good as this video, and it’s not even good enough to get added to this collection of Reagan videos, but it is a good description of why socialism is a failure.

P.S. There was one other president in the 20th century who deserves praise and applause.

Tax Cartels Mean Ever-Higher Tax Rates

When President Biden proposed a “global minimum tax” for businesses, I immediately warned that would lead to ever-increasing tax rates.

Ross Kaminsky of KHOW and I discussed how this is already happening.

I hate being right, but it’s always safe to predict that politicians and bureaucrats will embrace policies that give more power to government.

Especially when they are very anxious to stifle tax competition.

For decades, people in government have been upset that the tax cuts implemented by Ronald Reagan and Margaret Thatchertriggered a four-decade trend of lower tax rates and pro-growth tax reform.

That’s the reason Biden and his Treasury Secretary proposed a 15 percent minimum tax rate for businesses.

And it’s the reason they now want the rate to be even higher.

Though even I’m surprised that they’re already pushing for that outcome when the original pact hasn’t even been approved or implemented.

Here are some passages from a report by Reuters.

Treasury Secretary Janet Yellen will press G20 counterparts this week for a global minimum corporate tax rate above the 15% floor agreed by 130 countries last week…the global minimum tax rate…is tied to the outcome of legislation to raise the U.S. minimum tax rate, a Treasury official said.The Biden administration has proposed doubling the U.S. minimum tax on corporations overseas intangible income to 21% along with a new companion “enforcement” tax that would deny deductions to companies for tax payments to countries that fail to adopt the new global minimum rate. The officials said several countries were pushing for a rate above 15%, along with the United States.

Other kleptocratic governments naturally want the same thing.

A G7 proposal for a global minimum tax rate of 15% is too low and a rate of at least 21% is needed, Argentina’s finance minister said on Monday, leading a push by some developing countries… “The 15% rate is way too low,” Argentine Finance Minister Martin Guzman told an online panel hosted by the Independent Commission for the Reform of International Corporate Taxation. …”The minimum rate being proposed would not do much to countries in Africa…,” Mathew Gbonjubola, Nigeria’s tax policy director, told the same conference.

Needless to say, I’m not surprised that Argentina is on the wrong side.

And supporters of class warfare also are agitating for a higher minimum rate. Here are some excerpts from a column in the New York Times by Gabriel Zucman and Gus Wezerek.

In the decades after World War II, close to 50 percent of American companies’ earnings went to state and federal taxes. …it was a golden period. …President Biden should be applauded for trying to end the race to the bottom on corporate tax rates. But even if Congress approves the 15 percent global minimum corporate tax, it won’t be enough. …the Biden administration to give working families a real leg up, it should push Congress to enact a 25 percent minimum tax, which would bring in about $200 billion in additional revenue each year. …With a 25 percent minimum corporate tax, the Biden administration would begin to reverse decades of growing inequality. And it would encourage other countries to do the same, replacing a race to the bottom with a sprint to the top.

I can’t resist making two observations about this ideological screed.

  1. Even the IMF and OECD agree that the so-called race to the bottom has not led to a decline in corporate tax revenues, even when measured as a share of economic output.
  2. Since companies legally avoid rather than illegally evade taxes, the headline of the column is utterly dishonest – but it’s what we’ve learned to expect from the New York Times.

The only good thing about the Zucman-Wezerek column is that it includes this chart showing how corporate tax rates have dramatically declined since 1980.

P.S. For those interested, the horizontal line at the bottom is for Bermuda, though other jurisdictions (such as Monaco and the Cayman Islands) also deserve credit for having no corporate income taxes.

P.P.S. If you want to know why high corporate tax rates are misguided, click here. And if you want to know why Biden’s plan to raise the U.S. corporate tax rate is misguided, click here. Or here. Or here.

P.P.P.S. And if you want more information about why Biden’s global tax cartel is bad, click here, here, and here.

I enjoyed this article below because it demonstrates that the Laffer Curve has been working for almost 100 years now when it is put to the test in the USA. I actually got to hear Arthur Laffer speak in person in 1981 and he told us in advance what was going to happen the 1980’s and it all came about as he said it would when Ronald Reagan’s tax cuts took place. I wish we would lower taxes now instead of looking for more revenue through raised taxes. We have to grow the economy:

What Mitt Romney Said Last Night About Tax Cuts And The Deficit Was Absolutely Right. And What Obama Said Was Absolutely Wrong.

Mitt Romney repeatedly said last night that he would not allow tax cuts to add to the deficit.  He repeatedly said it because over and over again Obama blathered the liberal talking point that cutting taxes necessarily increased deficits.

Romney’s exact words: “I want to underline that — no tax cut that adds to the deficit.”

Meanwhile, Obama has promised to cut the deficit in half during his first four years – but instead gave America the highest deficits in the history of the entire human race.

I’ve written about this before.  Let’s replay what has happened every single time we’ve ever cut the income tax rate.

The fact of the matter is that we can go back to Calvin Coolidge who said very nearly THE EXACT SAME THING to his treasury secretary: he too would not allow any tax cuts that added to the debt.  Andrew Mellon – quite possibly the most brilliant economic mind of his day – did a great deal of research and determined what he believed was the best tax rate.  And the Coolidge administration DID cut income taxes and MASSIVELY increased revenues.  Coolidge and Mellon cut the income tax rate 67.12 percent (from 73 to 24 percent); and revenues not only did not go down, but they went UP by at least 42.86 percent (from $700 billion to over $1 billion).

That’s something called a documented fact.  But that wasn’t all that happened: another incredible thing was that the taxes and percentage of taxes paid actually went UP for the rich.  Because as they were allowed to keep more of the profits that they earned by investing in successful business, they significantly increased their investments and therefore paid more in taxes than they otherwise would have had they continued sheltering their money to protect themselves from the higher tax rates.  Liberals ignore reality, but it is simply true.  It is a fact.  It happened.

Then FDR came along and raised the tax rates again and the opposite happened: we collected less and less revenue while the burden of taxation fell increasingly on the poor and middle class again.  Which is exactly what Obama wants to do.

People don’t realize that John F. Kennedy, one of the greatest Democrat presidents, was a TAX CUTTER who believed the conservative economic philosophy that cutting tax rates would in fact increase tax revenues.  He too cut taxes, and he too increased tax revenues.

So we get to Ronald Reagan, who famously cut taxes.  And again, we find that Reagan cut that godawful liberal tax rate during an incredibly godawful liberal-caused economic recession, and he increased tax revenue by 20.71 percent (with revenues increasing from $956 billion to $1.154 trillion).  And again, the taxes were paid primarily by the rich:

“The share of the income tax burden borne by the top 10 percent of taxpayers increased from 48.0 percent in 1981 to 57.2 percent in 1988. Meanwhile, the share of income taxes paid by the bottom 50 percent of taxpayers dropped from 7.5 percent in 1981 to 5.7 percent in 1988.”

So we get to George Bush and the Bush tax cuts that liberals and in particular Obama have just demonized up one side and demagogued down the other.  And I can simply quote the New York Times AT the time:

Sharp Rise in Tax Revenue to Pare U.S. Deficit By EDMUND L. ANDREWS Published: July 13, 2005

WASHINGTON, July 12 – For the first time since President Bush took office, an unexpected leap in tax revenue is about to shrink the federal budget deficit this year, by nearly $100 billion.

A Jump in Corporate Payments On Wednesday, White House officials plan to announce that the deficit for the 2005 fiscal year, which ends in September, will be far smaller than the $427 billion they estimated in February.

Mr. Bush plans to hail the improvement at a cabinet meeting and to cite it as validation of his argument that tax cuts would stimulate the economy and ultimately help pay for themselves.

Based on revenue and spending data through June, the budget deficit for the first nine months of the fiscal year was $251 billion, $76 billion lower than the $327 billion gap recorded at the corresponding point a year earlier.

The Congressional Budget Office estimated last week that the deficit for the full fiscal year, which reached $412 billion in 2004, could be “significantly less than $350 billion, perhaps below $325 billion.”

The big surprise has been in tax revenue, which is running nearly 15 percent higher than in 2004. Corporate tax revenue has soared about 40 percent, after languishing for four years, and individual tax revenue is up as well
.

And of course the New York Times, as reliable liberals, use the adjective whenever something good happens under conservative policies and whenever something bad happens under liberal policies: ”unexpected.”   But it WASN’T ”unexpected.”  It was EXACTLY what Republicans had said would happen and in fact it was exactly what HAD IN FACT HAPPENED every single time we’ve EVER cut income tax rates.

The truth is that conservative tax policy has a perfect track record: every single time it has ever been tried, we have INCREASED tax revenues while not only exploding economic activity and creating more jobs, but encouraging the wealthy to pay more in taxes as well.  And liberals simply dishonestly refuse to acknowledge documented history.

Meanwhile, liberals also have a perfect record … of FAILUREThey keep raising taxes and keep not understanding why they don’t get the revenues they predicted.

The following is a section from my article, “Tax Cuts INCREASE Revenues; They Have ALWAYS Increased Revenues“, where I document every single thing I said above:

The Falsehood That Tax Cuts Increase The Deficit

Now let’s take a look at the utterly fallacious view that tax cuts in general create higher deficits.

Let’s take a trip back in time, starting with the 1920s.  From Burton Folsom’s book, New Deal or Raw Deal?:

In 1921, President Harding asked the sixty-five-year-old [Andrew] Mellon to be secretary of the treasury; the national debt [resulting from WWI] had surpassed $20 billion and unemployment had reached 11.7 percent, one of the highest rates in U.S. history.  Harding invited Mellon to tinker with tax rates to encourage investment without incurring more debt. Mellon studied the problem carefully; his solution was what is today called “supply side economics,” the idea of cutting taxes to stimulate investment.  High income tax rates, Mellon argued, “inevitably put pressure upon the taxpayer to withdraw this capital from productive business and invest it in tax-exempt securities. . . . The result is that the sources of taxation are drying up, wealth is failing to carry its share of the tax burden; and capital is being diverted into channels which yield neither revenue to the Government nor profit to the people” (page 128).

Mellon wrote, “It seems difficult for some to understand that high rates of taxation do not necessarily mean large revenue to the Government, and that more revenue may often be obtained by lower taxes.”  And he compared the government setting tax rates on incomes to a businessman setting prices on products: “If a price is fixed too high, sales drop off and with them profits.”

And what happened?

“As secretary of the treasury, Mellon promoted, and Harding and Coolidge backed, a plan that eventually cut taxes on large incomes from 73 to 24 percent and on smaller incomes from 4 to 1/2 of 1 percent.  These tax cuts helped produce an outpouring of economic development – from air conditioning to refrigerators to zippers, Scotch tape to radios and talking movies.  Investors took more risks when they were allowed to keep more of their gains.  President Coolidge, during his six years in office, averaged only 3.3 percent unemployment and 1 percent inflation – the lowest misery index of any president in the twentieth century.

Furthermore, Mellon was also vindicated in his astonishing predictions that cutting taxes across the board would generate more revenue.  In the early 1920s, when the highest tax rate was 73 percent, the total income tax revenue to the U.S. government was a little over $700 million.  In 1928 and 1929, when the top tax rate was slashed to 25 and 24 percent, the total revenue topped the $1 billion mark.  Also remarkable, as Table 3 indicates, is that the burden of paying these taxes fell increasingly upon the wealthy” (page 129-130).

Now, that is incredible upon its face, but it becomes even more incredible when contrasted with FDR’s antibusiness and confiscatory tax policies, which both dramatically shrunk in terms of actual income tax revenues (from $1.096 billion in 1929 to $527 million in 1935), and dramatically shifted the tax burden to the backs of the poor by imposing huge new excise taxes (from $540 million in 1929 to $1.364 billion in 1935).  See Table 1 on page 125 of New Deal or Raw Deal for that information.

FDR both collected far less taxes from the rich, while imposing a far more onerous tax burden upon the poor.

It is simply a matter of empirical fact that tax cuts create increased revenue, and that those [Democrats] who have refused to pay attention to that fact have ended up reducing government revenues even as they increased the burdens on the poorest whom they falsely claim to help.

Let’s move on to John F. Kennedy, one of the most popular Democrat presidents ever.  Few realize that he was also a supply-side tax cutter.

Kennedy said:

“It is a paradoxical truth that tax rates are too high and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now … Cutting taxes now is not to incur a budget deficit, but to achieve the more prosperous, expanding economy which can bring a budget surplus.”

– John F. Kennedy, Nov. 20, 1962, president’s news conference


“Lower rates of taxation will stimulate economic activity and so raise the levels of personal and corporate income as to yield within a few years an increased – not a reduced – flow of revenues to the federal government.”

– John F. Kennedy, Jan. 17, 1963, annual budget message to the Congress, fiscal year 1964

“In today’s economy, fiscal prudence and responsibility call for tax reduction even if it temporarily enlarges the federal deficit – why reducing taxes is the best way open to us to increase revenues.”

– John F. Kennedy, Jan. 21, 1963, annual message to the Congress: “The Economic Report Of The President”


“It is no contradiction – the most important single thing we can do to stimulate investment in today’s economy is to raise consumption by major reduction of individual income tax rates.”

– John F. Kennedy, Jan. 21, 1963, annual message to the Congress: “The Economic Report Of The President”


“Our tax system still siphons out of the private economy too large a share of personal and business purchasing power and reduces the incentive for risk, investment and effort – thereby aborting our recoveries and stifling our national growth rate.”

– John F. Kennedy, Jan. 24, 1963, message to Congress on tax reduction and reform, House Doc. 43, 88th Congress, 1st Session.


“A tax cut means higher family income and higher business profits and a balanced federal budget. Every taxpayer and his family will have more money left over after taxes for a new car, a new home, new conveniences, education and investment. Every businessman can keep a higher percentage of his profits in his cash register or put it to work expanding or improving his business, and as the national income grows, the federal government will ultimately end up with more revenues.”

– John F. Kennedy, Sept. 18, 1963, radio and television address to the nation on tax-reduction bill

Which is to say that modern Democrats are essentially calling one of their greatest presidents a liar when they demonize tax cuts as a means of increasing government revenues.

So let’s move on to Ronald Reagan.  Reagan had two major tax cutting policies implemented: the Economic Recovery Tax Act (ERTA) of 1981, which was retroactive to 1981, and the Tax Reform Act of 1986.

Did Reagan’s tax cuts decrease federal revenues?  Hardly:

We find that 8 of the following 10 years there was a surplus of revenue from 1980, prior to the Reagan tax cuts.  And, following the Tax Reform Act of 1986, there was a MASSIVE INCREASEof revenue.

So Reagan’s tax cuts increased revenue.  But who paid the increased tax revenue?  The poor?  Opponents of the Reagan tax cuts argued that his policy was a giveaway to the rich (ever heard that one before?) because their tax payments would fall.  But that was exactly wrong.  In reality:

“The share of the income tax burden borne by the top 10 percent of taxpayers increased from 48.0 percent in 1981 to 57.2 percent in 1988. Meanwhile, the share of income taxes paid by the bottom 50 percent of taxpayers dropped from 7.5 percent in 1981 to 5.7 percent in 1988.”

So Ronald Reagan a) collected more total revenue, b) collected more revenue from the rich, while c) reducing revenue collected by the bottom half of taxpayers, and d) generated an economic powerhouse that lasted – with only minor hiccups – for nearly three decades.  Pretty good achievement considering that his predecessor was forced to describe his own economy as a “malaise,” suffering due to a “crisis of confidence.” Pretty good considering that President Jimmy Carter responded to a reporter’s question as to what he would do about the problem of inflation by answering, “It would be misleading for me to tell any of you that there is a solution to it.”

Reagan whipped inflation.  Just as he whipped that malaise and that crisis of confidence.

________

The Laffer Curve, Part III: Dynamic Scoring

Twitter Mob Comes for Dave Chappelle. It’s Time to Realize It Isn’t as Powerful as It Thinks. 

A.F. Branco for Jan 12, 2022
 width=

Provocative comedian Dave Chappelle is in hot water again. His new Netflix special “The Closer” has been the subject of numerous articles accusing Chappelle of transphobia and homophobia. (Photo: Lester Cohen/WireImage via Getty Images)

Perennially persecuted comedy legend Dave Chappelle is under fire yet again.

The controversy began after his latest special “The Closer” aired on Netflix. Chappelle, with his usual brand of acerbic humor, made a series of jokes that ran afoul of transgender ideology.

Chappelle is no stranger to controversy. His 2019 special “Sticks & Stones” faced similar accusations of transphobia from a vindictive press.

One topic that Chappelle joked about in “The Closer” was the outrage directed at “Harry Potter” author J.K. Rowling.

“They canceled J.K. Rowling—my God. Effectively, she said gender was a fact, the trans community got mad as s—, they started calling her a TERF,” said the comedian.

TERF stands for “trans exclusionary radical feminist” and is used as a pejorative against feminists who don’t think biological men are women.

Chappelle continued, “I’m Team TERF. I agree. I agree, man. Gender is a fact.”

Cue the outrage. Articles spewed forth from the font of regularly aggrieved leftist journalists, including a loaded headline from NPR reading, “For Dave Chappelle, Punchlines Are Dares. His New Special, ‘The Closer,’ Goes too Far.

Not to be outdone, The Independent ran a piece titled “Meet the New Dave Chappelle—Misogynistic, Anti-Trans and Socially Irresponsible.

The hit pieces against Chappelle continued as the story developed. “Netflix Defends Dave Chappelle’s Anti-Trans Remarks and Suspends a Trans Employee,” reported Time after Netflix CEO Ted Sarandos initially defended Chappelle and the special and the company suspended Terra Field, a biological man who identifies as a woman, along with two other employees for barging into an executive-level meeting in order to complain about the “The Closer.”

Notably, Sarandos has since caved to the pressure, saying he “screwed up” in his preliminary response to the outrage. However, the special remains on Netflix.

But for all of those news outlets writing on this “uproar,” there appears to be more demand for outrage than can be provided naturally.

Stephen Miller, a contributor with The Spectator, noted, “The story cites 3 tweets, one from an account they call ‘a Twitter user’ with 200 followers. If a news story simply cites you as ‘one twitter user said..’ your opinion isn’t newsworthy. It’s irrelevant. Facebook is not the problem.”

The media are so desperate for oxygen to keep the Chappelle controversy alive, they’re soliciting actor Channing Tatum’s thoughts on it.

Really? Why should we care about what Tatum, a man most famous for playing a stripper in a movie six years ago, has to say about Chappelle? In fact, why should we care what any number of leftists on Twitter have to say about Chappelle?

Twitter is not indicative of real life. According to a 2020 Pew Research Center report, “just 10% of users produced 92% of all tweets from U.S. adults since last November, and that 69% of these highly prolific users identify as Democrats or Democratic-leaning independents.”

That is an obscenely small number of people driving cultural narratives like the Dave Chappelle story. But it also indicates that the narrative itself is being propped up by a group that doesn’t represent the average American, who likely either agrees with Chappelle or couldn’t care less.

June Gallup polling indicates that 30% of Americans identify as socially conservative, while 35% identify as moderate. That’s a far cry from a majority who buy into the radical left’s demands for progressive orthodoxy.

Chappelle himself said it best during “The Closer,” “When ‘Sticks & Stones’ came out, a lot of people in the trans community were furious with me and apparently they dragged me on Twitter. I don’t give a —- cuz Twitter’s not a real place!”

The sooner people stop giving unrepresentative Twitter mobs the time of day, the sooner they lose their monopoly on the narrative.

Have an opinion about this article? To sound off, please email letters@DailySignal.com and we’ll consider publishing your edited remarks in our regular “We Hear You” feature. Remember to include the url or headline of the article plus your name and town and/or state.

Kamala Harris official photo (cropped2).jpg


Honorable Vice President Kamala Harris c/o The White House

1600 Pennsylvania Avenue NW
Washington, DC 20500

Dear Mrs. Vice President,

“Is it true that your administration has set things in motion that will hurt women’s sports?”

Tucker Carlson: Biden brings ‘equality’ to girls’ sports, and who knows what’s next?

Forget women’s empowerment, it takes a real civil rights leader to use federal power to humiliate and endanger women on behalf of biological men

You may have missed it, but Joe Bidendevoted part of his very first day in officeto addressing one of this nation’s most pressing problems: Girls’ sports.

The main problem with girls’ sports, obviously, is that they lack diversity: Only girls get to play. That’s wrong, and Joe Biden plans to fix it; to break the turf ceiling, if you will.

Now, for the first time in history, men will be allowed to compete in, for example, girls’ field hockey, and then change in the girls’ locker room afterward. Joe Biden has signed an executive order requiring it. Even Barack Obama didn’t do that.

This makes Joe Biden a #civilrightshero. There’s been a lot of talk recently about women’s empowerment, but it takes a real leader, a once-in-a-generation moral visionary, to go further than that and use federal power to humiliate and endanger women on behalf of biological men. That is next-level feminism. That is real empowerment.

That’s the Joe Biden program, and he’s been planning it for years. This is what he said last February:

BIDEN: Well, no, the animating promise of this country, that all men and women are created equal, has never been fulfilled.

By “equal,” Joe Biden means “identical”. There are no differences between men and women, that’s the position. Those gender categories we’ve heard about since the dawn of recorded history are fake. So there’s no reason to protect women from men under any circumstances, because the whole idea of men and women isn’t real.

Not everyone believes this, of course. Science isn’t always popular (or the peasants don’t understand it). There are still troglodytes out there in the year 2021 who are trying to keep men out of women’s sports. Yes, Donald Trump is gone. But that doesn’t mean hate has taken a holiday.

 –

But Joe Biden is not intimidated by that. He doesn’t care that pretty much no one in America agrees with him or even understands what he’s talking about. When Joe Biden watches girls’ gymnastics, as he frequently does, and doesn’t see a single biological man walking the balance beam or swinging from the uneven bars, he doesn’t just sit back and accept the status quo. He acts with force and certainty.

 –

Now, activism like that may seem modern, but it’s not new for Joe Biden. For 60 years, he has been fighting transphobia. Way back in the summer of 1962, decades before it was fashionable, Joe Biden confronted a vicious transphobe called Corn Pop, who wanted to keep men out of the girls’ changing room at a public pool in Wilmington. It was a different time back then, but Joe Biden wouldn’t have it. He threatened to beat Corn Pop with a six-foot chain, and that was just the beginning.

Decades later, Joe Biden flew all the way to South Africa to free Nelson Mandela from prison. Most of us assumed he was risking his life to fight the racist policies of the South African government. What we didn’t know was that Joe Biden was actually fighting a more insidious foe, gender apartheid. Robben Island was men-only, segregated by sex, if you can imagine.

But the fight isn’t over yet. Joe Biden’s holy war of liberation continues. Even now, in this supposedly liberated time, groups of women still saunter to the ladies room together in restaurants across America with not a single man joining them in the stall. That happens, believe it or not. It happens right now. There are still sexually segregated public showers in this nation, not to mention dressing rooms in retail stores, that men aren’t allowed to enter.  And what about your house? How many boys slept over at your seventh grade daughter’s most recent slumber party?

year-old child decides, ‘You know, I decided I want to be transgender. That’s what I think I’d like to be. It’ll make my life a lot easier. There should be zero discrimination

Joe Biden has a solution. Sixty years ago, he fought Corn Pop with a chain to protect the right of biological men to be present when girls change into their bathing suits, and he’ll bring that same moral clarity to your daughter’s lacrosse team.

CLICK HERE TO GET THE FOX NEWS APP

Leadership like that will change this country. In time, you won’t hear people claiming to be the first female this or first female that because honestly, in a truly liberated society, who can say what’s female? Why shouldn’t Mike Pence announce that actually, he was the first woman to serve as vice president? Who could call him wrong?

Not us. We don’t do hate speech here.

This article is adapted from Tucker Carlson’s opening commentary on the Jan. 22, 2021 edition of “Tucker Carlson Tonight.”


Joe Biden’s First Day Began the End of Girls’ Sports

An executive order rigs competition by requiring that biological boys be allowed to compete against girls.

President Biden signs an executive order in the Oval Office, Jan. 20.

President Biden signs an executive order in the Oval Office, Jan. 20.

PHOTO: DOUG MILLS/POOL/SHUTTERSTOCK

Amid Inauguration Day talk of shattered glass ceilings, on Wednesday President Biden delivered a body blow to the rights of women and girls: the Executive Order on Preventing and Combating Discrimination on the Basis of Gender Identity or Sexual Orientation. On day one, Mr. Biden placed all girls’ sports and women’s safe spaces in the crosshairs of the administrative state.

The order declares: “Children should be able to learn without worrying about whether they will be denied access to the rest room, the locker room, or school sports. . . . All persons should receive equal treatment under the law, no matter their gender identity or sexual orientation.” The order purports to direct administrative agencies to begin promulgating regulations that would enforce the Supreme Court’s 2020 decision Bostock v. Clayton County. In fact, it goes much further.

In Bostock, the justices held that Title VII of the Civil Rights Act of 1964 prohibited an employer from firing an employee on the basis of homosexuality or “transgender status.” Justice Neil Gorsuch, writing for a 6-3 majority, took pains to clarify that the decision was limited to employment and had no bearing on “sex-segregated bathrooms, locker rooms, and dress codes”—all regulated under Title IX of the 1972 Education Amendments. “Under Title VII, too,” the majority added, “we do not purport to address bathrooms, locker rooms, or anything else of the kind.”

The Biden executive order is far more ambitious. Any school that receives federal funding—including nearly every public high school—must either allow biological boys who self-identify as girls onto girls’ sports teams or face administrative action from the Education Department. If this policy were to be broadly adopted in anticipation of the regulations that are no doubt on the way, what would this mean for girls’ and women’s sports?

“Finished. Done,” Olympic track-and-field coach Linda Blade told me. “The leadership skills, all the benefits society gets from letting girls have their protected category so that competition can be fair, all the advances of women’s rights—that’s going to be diminished.” Ms. Blade noted that parents of teen girls are generally uninterested in watching their daughters demoralized by the blatant unfairness of a rigged competition.

I say rigged because in contests of strength and speed, the athletic chasm between the sexes, which opens at puberty, is both permanent and unbridgeable. Once male puberty is complete, testosterone suppression doesn’t undo the biological advantages men possess: larger hearts, lungs and bones, greater bone density, more-oxygenated blood, more fast-twitch muscle fiber and vastly greater muscle mass.

It should be no surprise, then, that the two trans-identified biological males permitted to compete in Connecticut state track finals against girls—neither of whom was a top sprinter as a boy—consistently claimed top spots competing as girls. They eliminated girls from advancement to regional championships, scouting and scholarship opportunities and trophies, and they set records no girl may ever equal.

How big is this performance gap? To take one example cited by the Connecticut female runners in their complaint against the Connecticut Interscholastic Athletic Conference, the fastest female sprinter in the world is American runner Allyson Felix, a woman with more gold medals than Usain Bolt. Her lifetime best for the 400-meter run is 49.26 seconds. Based on 2018 data, nearly 300 high-school boys in the U.S. alone could beat it.

Even if allowing biological boys to join girls’ teams means girls can’t win, isn’t it still worth trying out for the team? Actually, no—even in sports that involve no contact and little injury risk, like running or tennis. It isn’t merely the trophies and scholarships and opportunities at stake. It isn’t even all the benefits sports have so long provided to young women—in self-esteem and health and camaraderie with friends. It isn’t merely that girls who participate in sports tend to earn better grades, that so many female Fortune 500 executives were athletes, or that sports force teen girls out of their own heads, where they might otherwise sit and stew to their detriment.

It’s the profound and glaring injustice of it: the spectacular records and achievements that Jackie Joyner, Althea Gibson and Wilma Rudolph would never have achieved had the world pitted their bodies against men.

Yet here we are. Decades of women’s achievement and opportunity rolled back by executive fiat. Battered women’s shelters, women’s jails and other safe spaces that receive federal funding and constitute “dwellings” under the Fair Housing Act may be next. Women’s rights turn out to be cheap and up for grabs. Who will voice objection?

Certainly not those caught up in the “historic” moment of the first female vice president. Hillary Clinton swooned on Twitter : “It delights me to think that what feels historical and amazing to us today—a woman sworn in to the vice presidency—will seem normal, obvious, ‘of course’ to Kamala’s grand-nieces as they grow up.” If only this je ne sais quoi weren’t accompanied by a far more material theft of female opportunity.

Ms. Shrier is author of “Irreversible Damage: The Transgender Craze Seducing Our Daughters.”

I must say I share your love for the LION, WITCH AND THE WARDROBE by C.S. Lewis. Sadly he died on the same day as two other notable gentleman (JFK and Aldous Huxley). Just like you I have a love for books! 

Thank you so much for your time.

Sincerely,

Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733

Related posts:

Milton Friedman’s Free to Choose (1980), episode 3 – Anatomy of a Crisis. part 1

“The Power of the Market” episode of Free to Choose in 1990 by Milton Friedman (Part 5)

Milton Friedman The Power of the Market 5-5 How can we have personal freedom without economic freedom? That is why I don’t understand why socialists who value individual freedoms want to take away our economic freedoms.  I wanted to share this info below with you from Milton Friedman who has influenced me greatly over the […]

“The Power of the Market” episode of Free to Choose in 1990 by Milton Friedman (Part 4)

Milton Friedman The Power of the Market 4-5 How can we have personal freedom without economic freedom? That is why I don’t understand why socialists who value individual freedoms want to take away our economic freedoms.  I wanted to share this info below with you from Milton Friedman who has influenced me greatly over the […]

“The Power of the Market” episode of Free to Choose in 1990 by Milton Friedman (Part 3)

Milton Friedman The Power of the Market 3-5 How can we have personal freedom without economic freedom? That is why I don’t understand why socialists who value individual freedoms want to take away our economic freedoms.  I wanted to share this info below with you from Milton Friedman who has influenced me greatly over the […]

“The Power of the Market” episode of Free to Choose in 1990 by Milton Friedman (Part 2)

Milton Friedman The Power of the Market 2-5 How can we have personal freedom without economic freedom? That is why I don’t understand why socialists who value individual freedoms want to take away our economic freedoms.  I wanted to share this info below with you from Milton Friedman who has influenced me greatly over the […]

“The Power of the Market” episode of Free to Choose in 1990 by Milton Friedman (Part 1)

Milton Friedman The Power of the Market 1-5 How can we have personal freedom without economic freedom? That is why I don’t understand why socialists who value individual freedoms want to take away our economic freedoms.  I wanted to share this info below with you from Milton Friedman who has influenced me greatly over the […]

“Friedman Friday” EPISODE “The Failure of Socialism” of Free to Choose in 1990 by Milton Friedman (Part 5)

Milton Friedman: Free To Choose – The Failure Of Socialism With Ronald Reagan (Full) Published on Mar 19, 2012 by NoNationalityNeeded Milton Friedman’s writings affected me greatly when I first discovered them and I wanted to share with you. Abstract: Ronald Reagan introduces this program, and traces a line from Adam Smith’s “The Wealth of […]

“Friedman Friday” EPISODE “The Failure of Socialism” of Free to Choose in 1990 by Milton Friedman (Part 4)

Milton Friedman: Free To Choose – The Failure Of Socialism With Ronald Reagan (Full) Published on Mar 19, 2012 by NoNationalityNeeded Milton Friedman’s writings affected me greatly when I first discovered them and I wanted to share with you. Abstract: Ronald Reagan introduces this program, and traces a line from Adam Smith’s “The Wealth of […]

“Friedman Friday” EPISODE “The Failure of Socialism” of Free to Choose in 1990 by Milton Friedman (Part 3)

Milton Friedman: Free To Choose – The Failure Of Socialism With Ronald Reagan (Full) Published on Mar 19, 2012 by NoNationalityNeeded Milton Friedman’s writings affected me greatly when I first discovered them and I wanted to share with you. Abstract: Ronald Reagan introduces this program, and traces a line from Adam Smith’s “The Wealth of […]

“Friedman Friday” EPISODE “The Failure of Socialism” of Free to Choose in 1990 by Milton Friedman (Part 2)

Milton Friedman: Free To Choose – The Failure Of Socialism With Ronald Reagan (Full) Published on Mar 19, 2012 by NoNationalityNeeded Milton Friedman’s writings affected me greatly when I first discovered them and I wanted to share with you. Abstract: Ronald Reagan introduces this program, and traces a line from Adam Smith’s “The Wealth of […]

“Friedman Friday,” EPISODE “The Failure of Socialism” of Free to Choose in 1990 by Milton Friedman (Part 1)

Milton Friedman: Free To Choose – The Failure Of Socialism With Ronald Reagan (Full) Published on Mar 19, 2012 by NoNationalityNeeded Milton Friedman’s writings affected me greatly when I first discovered them and I wanted to share with you. We must not head down the path of socialism like Greece has done. Abstract: Ronald Reagan […]

Williams with Sowell – Minimum Wage

Thomas Sowell

Thomas Sowell – Reducing Black Unemployment

By WALTER WILLIAMS

—-

Ronald Reagan with Milton Friedman
Milton Friedman The Power of the Market 2-5

Dan Mitchell article Reducing the corporate tax rate from 35 percent to 21 percent was the crown jewel of Trump’s 2017 Tax Cut and Jobs Act(TCJA)!

  •  

 

 

The Laffer Curve and Trump’s 21 Percent Corporate Tax Rate

Reducing the corporate tax rate from 35 percent to 21 percent was the crown jewel of Trump’s 2017 Tax Cut and Jobs Act(TCJA).

  • It was good for workers since a lower rate means more investment, which translates to increased productivity and higher wages.
  • And it was good for U.S. competitiveness since the United States corporate tax rate no longer was the highest in the developed world.

Some critics downplayed those benefits and warned that a lower corporate tax rate would deprive the government of too much revenue.

Since I don’t want politicians to have more money, that was not a persuasive argument. Moreover, I argued during the debate in 2017 that a lower corporate tax rate would generate “revenue feedback.”

In other words, there would be a “Laffer Curve” effect as corporations responded to a lower tax rate by earning and reporting more income.

Based on the latest fiscal data from the Congressional Budget Office (CBO), I was right.

Corporate tax revenues for the 2021 fiscal year (which ended on September 30) were $370 billion. As shown in this chart, that’s only slightly below CBO’s estimate back in 2017 of how much revenue would be collected – $383 billion – if the rate stayed at 35 percent.

The chart also shows CBO’s 2018 estimate of what revenues would be in 2021 with a 21 percent rate (and if you want more data, the Joint Committee on Taxation estimated that the Trump tax reform would reduce corporate revenues in 2021 by $131 billion).

This leads me to ask two questions.

  1. Is this a slam-dunk argument for the Laffer Curve?
  2. Did the lower corporate tax revenue generate so much revenue feedback that it was almost self-financing?

The answer to the first question almost certainly is “yes” but “don’t exaggerate” is probably the prudent response to the second question.

Here are a few reasons to be cautious about making bold assertions.

  • CBO’s pre-TCJA estimate in 2017 may have been wrong for reasons that have nothing to do with the tax rate.
  • CBO’s post-TCJA estimate in 2018 may have been wrong for reasons that have nothing to do with the tax rate.
  • The surge of 2021 revenues may have been a one-time blip that will disappear or fade in the next few years.
  • The coronoavirus pandemic, or the policy response from Washington, may be distorting the numbers.

These are all legitimate caveats, so presumably it would be an exaggeration to simply look at the above chart and claim Trump’s reduction in the corporate tax rate almost “paid for itself.”

But we can look at the chart and state that there was a lot of revenue feedback, which shows that the lower corporate tax rate did produce good economic results.

Perhaps most important, we now have more evidence that Biden’s plan to increase the corporate tax rate is very misguided. Yes, it’s possible that the President’s plan may generate a bit of additional tax revenue, but at a very steep cost for workers, consumers, and shareholders.

P.S. If you want an example of tax cut that was self-financing, check out the IRS data on how much the rich paid before and after the Reagan tax cuts.


 I enjoyed this article below because it demonstrates that the Laffer Curve has been working for almost 100 years now when it is put to the test in the USA. I actually got to hear Arthur Laffer speak in person in 1981 and he told us in advance what was going to happen the 1980’s and it all came about as he said it would when Ronald Reagan’s tax cuts took place. I wish we would lower taxes now instead of looking for more revenue through raised taxes. We have to grow the economy:

What Mitt Romney Said Last Night About Tax Cuts And The Deficit Was Absolutely Right. And What Obama Said Was Absolutely Wrong.

Mitt Romney repeatedly said last night that he would not allow tax cuts to add to the deficit.  He repeatedly said it because over and over again Obama blathered the liberal talking point that cutting taxes necessarily increased deficits.

Romney’s exact words: “I want to underline that — no tax cut that adds to the deficit.”

Meanwhile, Obama has promised to cut the deficit in half during his first four years – but instead gave America the highest deficits in the history of the entire human race.

I’ve written about this before.  Let’s replay what has happened every single time we’ve ever cut the income tax rate.

The fact of the matter is that we can go back to Calvin Coolidge who said very nearly THE EXACT SAME THING to his treasury secretary: he too would not allow any tax cuts that added to the debt.  Andrew Mellon – quite possibly the most brilliant economic mind of his day – did a great deal of research and determined what he believed was the best tax rate.  And the Coolidge administration DID cut income taxes and MASSIVELY increased revenues.  Coolidge and Mellon cut the income tax rate 67.12 percent (from 73 to 24 percent); and revenues not only did not go down, but they went UP by at least 42.86 percent (from $700 billion to over $1 billion).

That’s something called a documented fact.  But that wasn’t all that happened: another incredible thing was that the taxes and percentage of taxes paid actually went UP for the rich.  Because as they were allowed to keep more of the profits that they earned by investing in successful business, they significantly increased their investments and therefore paid more in taxes than they otherwise would have had they continued sheltering their money to protect themselves from the higher tax rates.  Liberals ignore reality, but it is simply true.  It is a fact.  It happened.

Then FDR came along and raised the tax rates again and the opposite happened: we collected less and less revenue while the burden of taxation fell increasingly on the poor and middle class again.  Which is exactly what Obama wants to do.

People don’t realize that John F. Kennedy, one of the greatest Democrat presidents, was a TAX CUTTER who believed the conservative economic philosophy that cutting tax rates would in fact increase tax revenues.  He too cut taxes, and he too increased tax revenues.

So we get to Ronald Reagan, who famously cut taxes.  And again, we find that Reagan cut that godawful liberal tax rate during an incredibly godawful liberal-caused economic recession, and he increased tax revenue by 20.71 percent (with revenues increasing from $956 billion to $1.154 trillion).  And again, the taxes were paid primarily by the rich:

“The share of the income tax burden borne by the top 10 percent of taxpayers increased from 48.0 percent in 1981 to 57.2 percent in 1988. Meanwhile, the share of income taxes paid by the bottom 50 percent of taxpayers dropped from 7.5 percent in 1981 to 5.7 percent in 1988.”

So we get to George Bush and the Bush tax cuts that liberals and in particular Obama have just demonized up one side and demagogued down the other.  And I can simply quote the New York Times AT the time:

Sharp Rise in Tax Revenue to Pare U.S. Deficit By EDMUND L. ANDREWS Published: July 13, 2005

WASHINGTON, July 12 – For the first time since President Bush took office, an unexpected leap in tax revenue is about to shrink the federal budget deficit this year, by nearly $100 billion.

A Jump in Corporate Payments On Wednesday, White House officials plan to announce that the deficit for the 2005 fiscal year, which ends in September, will be far smaller than the $427 billion they estimated in February.

Mr. Bush plans to hail the improvement at a cabinet meeting and to cite it as validation of his argument that tax cuts would stimulate the economy and ultimately help pay for themselves.

Based on revenue and spending data through June, the budget deficit for the first nine months of the fiscal year was $251 billion, $76 billion lower than the $327 billion gap recorded at the corresponding point a year earlier.

The Congressional Budget Office estimated last week that the deficit for the full fiscal year, which reached $412 billion in 2004, could be “significantly less than $350 billion, perhaps below $325 billion.”

The big surprise has been in tax revenue, which is running nearly 15 percent higher than in 2004. Corporate tax revenue has soared about 40 percent, after languishing for four years, and individual tax revenue is up as well
.

And of course the New York Times, as reliable liberals, use the adjective whenever something good happens under conservative policies and whenever something bad happens under liberal policies: ”unexpected.”   But it WASN’T ”unexpected.”  It was EXACTLY what Republicans had said would happen and in fact it was exactly what HAD IN FACT HAPPENED every single time we’ve EVER cut income tax rates.

The truth is that conservative tax policy has a perfect track record: every single time it has ever been tried, we have INCREASED tax revenues while not only exploding economic activity and creating more jobs, but encouraging the wealthy to pay more in taxes as well.  And liberals simply dishonestly refuse to acknowledge documented history.

Meanwhile, liberals also have a perfect record … of FAILUREThey keep raising taxes and keep not understanding why they don’t get the revenues they predicted.

The following is a section from my article, “Tax Cuts INCREASE Revenues; They Have ALWAYS Increased Revenues“, where I document every single thing I said above:

The Falsehood That Tax Cuts Increase The Deficit

Now let’s take a look at the utterly fallacious view that tax cuts in general create higher deficits.

Let’s take a trip back in time, starting with the 1920s.  From Burton Folsom’s book, New Deal or Raw Deal?:

In 1921, President Harding asked the sixty-five-year-old [Andrew] Mellon to be secretary of the treasury; the national debt [resulting from WWI] had surpassed $20 billion and unemployment had reached 11.7 percent, one of the highest rates in U.S. history.  Harding invited Mellon to tinker with tax rates to encourage investment without incurring more debt. Mellon studied the problem carefully; his solution was what is today called “supply side economics,” the idea of cutting taxes to stimulate investment.  High income tax rates, Mellon argued, “inevitably put pressure upon the taxpayer to withdraw this capital from productive business and invest it in tax-exempt securities. . . . The result is that the sources of taxation are drying up, wealth is failing to carry its share of the tax burden; and capital is being diverted into channels which yield neither revenue to the Government nor profit to the people” (page 128).

Mellon wrote, “It seems difficult for some to understand that high rates of taxation do not necessarily mean large revenue to the Government, and that more revenue may often be obtained by lower taxes.”  And he compared the government setting tax rates on incomes to a businessman setting prices on products: “If a price is fixed too high, sales drop off and with them profits.”

And what happened?

“As secretary of the treasury, Mellon promoted, and Harding and Coolidge backed, a plan that eventually cut taxes on large incomes from 73 to 24 percent and on smaller incomes from 4 to 1/2 of 1 percent.  These tax cuts helped produce an outpouring of economic development – from air conditioning to refrigerators to zippers, Scotch tape to radios and talking movies.  Investors took more risks when they were allowed to keep more of their gains.  President Coolidge, during his six years in office, averaged only 3.3 percent unemployment and 1 percent inflation – the lowest misery index of any president in the twentieth century.

Furthermore, Mellon was also vindicated in his astonishing predictions that cutting taxes across the board would generate more revenue.  In the early 1920s, when the highest tax rate was 73 percent, the total income tax revenue to the U.S. government was a little over $700 million.  In 1928 and 1929, when the top tax rate was slashed to 25 and 24 percent, the total revenue topped the $1 billion mark.  Also remarkable, as Table 3 indicates, is that the burden of paying these taxes fell increasingly upon the wealthy” (page 129-130).

Now, that is incredible upon its face, but it becomes even more incredible when contrasted with FDR’s antibusiness and confiscatory tax policies, which both dramatically shrunk in terms of actual income tax revenues (from $1.096 billion in 1929 to $527 million in 1935), and dramatically shifted the tax burden to the backs of the poor by imposing huge new excise taxes (from $540 million in 1929 to $1.364 billion in 1935).  See Table 1 on page 125 of New Deal or Raw Deal for that information.

FDR both collected far less taxes from the rich, while imposing a far more onerous tax burden upon the poor.

It is simply a matter of empirical fact that tax cuts create increased revenue, and that those [Democrats] who have refused to pay attention to that fact have ended up reducing government revenues even as they increased the burdens on the poorest whom they falsely claim to help.

Let’s move on to John F. Kennedy, one of the most popular Democrat presidents ever.  Few realize that he was also a supply-side tax cutter.

Kennedy said:

“It is a paradoxical truth that tax rates are too high and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now … Cutting taxes now is not to incur a budget deficit, but to achieve the more prosperous, expanding economy which can bring a budget surplus.”

– John F. Kennedy, Nov. 20, 1962, president’s news conference


“Lower rates of taxation will stimulate economic activity and so raise the levels of personal and corporate income as to yield within a few years an increased – not a reduced – flow of revenues to the federal government.”

– John F. Kennedy, Jan. 17, 1963, annual budget message to the Congress, fiscal year 1964

“In today’s economy, fiscal prudence and responsibility call for tax reduction even if it temporarily enlarges the federal deficit – why reducing taxes is the best way open to us to increase revenues.”

– John F. Kennedy, Jan. 21, 1963, annual message to the Congress: “The Economic Report Of The President”


“It is no contradiction – the most important single thing we can do to stimulate investment in today’s economy is to raise consumption by major reduction of individual income tax rates.”

– John F. Kennedy, Jan. 21, 1963, annual message to the Congress: “The Economic Report Of The President”


“Our tax system still siphons out of the private economy too large a share of personal and business purchasing power and reduces the incentive for risk, investment and effort – thereby aborting our recoveries and stifling our national growth rate.”

– John F. Kennedy, Jan. 24, 1963, message to Congress on tax reduction and reform, House Doc. 43, 88th Congress, 1st Session.


“A tax cut means higher family income and higher business profits and a balanced federal budget. Every taxpayer and his family will have more money left over after taxes for a new car, a new home, new conveniences, education and investment. Every businessman can keep a higher percentage of his profits in his cash register or put it to work expanding or improving his business, and as the national income grows, the federal government will ultimately end up with more revenues.”

– John F. Kennedy, Sept. 18, 1963, radio and television address to the nation on tax-reduction bill

Which is to say that modern Democrats are essentially calling one of their greatest presidents a liar when they demonize tax cuts as a means of increasing government revenues.

So let’s move on to Ronald Reagan.  Reagan had two major tax cutting policies implemented: the Economic Recovery Tax Act (ERTA) of 1981, which was retroactive to 1981, and the Tax Reform Act of 1986.

Did Reagan’s tax cuts decrease federal revenues?  Hardly:

We find that 8 of the following 10 years there was a surplus of revenue from 1980, prior to the Reagan tax cuts.  And, following the Tax Reform Act of 1986, there was a MASSIVE INCREASEof revenue.

So Reagan’s tax cuts increased revenue.  But who paid the increased tax revenue?  The poor?  Opponents of the Reagan tax cuts argued that his policy was a giveaway to the rich (ever heard that one before?) because their tax payments would fall.  But that was exactly wrong.  In reality:

“The share of the income tax burden borne by the top 10 percent of taxpayers increased from 48.0 percent in 1981 to 57.2 percent in 1988. Meanwhile, the share of income taxes paid by the bottom 50 percent of taxpayers dropped from 7.5 percent in 1981 to 5.7 percent in 1988.”

So Ronald Reagan a) collected more total revenue, b) collected more revenue from the rich, while c) reducing revenue collected by the bottom half of taxpayers, and d) generated an economic powerhouse that lasted – with only minor hiccups – for nearly three decades.  Pretty good achievement considering that his predecessor was forced to describe his own economy as a “malaise,” suffering due to a “crisis of confidence.” Pretty good considering that President Jimmy Carter responded to a reporter’s question as to what he would do about the problem of inflation by answering, “It would be misleading for me to tell any of you that there is a solution to it.”

Reagan whipped inflation.  Just as he whipped that malaise and that crisis of confidence.

________

The Laffer Curve, Part III: Dynamic Scoring