Arthur Laffer is still peddling his supply-side nonsense
President Donald Trump last week invoked the name of Arthur Laffer in defense of his still-embryonic tax-cut plan. Along with David Stockman, President Ronald Reagan’s budget director, Laffer was present when supply-side economics was briefly taken seriously.
Stockman has spent the last 30 years apologizing, admitting that supply-side and “trickle-down” economics are the same and that tax cuts could never pay for themselves. At best, says conservative economist Greg Mankiw of Harvard, growth could cover about a third of the cost of tax cuts.
Still, false hope underpins the plan that Trump and congressional Republicans hope to pass before year’s end. There is still widespread disagreement among Republicans about what to cut and how to pay for it.
There are only three certainties about the plan: One, a huge percentage of its benefits would go to a small percentage of taxpayers; two, it wouldn’t pay for itself, and three, its supporters are lying about points one and two.
Laffer, 77, appeared on the Fox Business channel earlier this month to argue that the tax plan will be so wonderful that even Democrats will love it.
“I’m hoping the Democrats vote with it. They should vote with it. They believe in it. They want it,” Laffer said. “… To let this partisanship go to that extreme that they vote against America is to me shocking. I can’t imagine a lot of them not voting in favor of the president’s bill.”
Trump saw that clip and took to his Twitter account, citing Laffer as an authoritative source: “Art Laffer just said that he doesn’t know how a Democrat could vote against the big tax cut/ reform bill and live with themselves!”
No Democrat who’s not planning to switch parties would vote for it, nor would any rational Republican. The nonpartisan Tax Policy Center estimates that 80 percent of the proposed tax cuts would go to the top 1 percent of earners over the next decade. Meanwhile a quarter of households in the middle 20 percent of wage-earners would see their tax bills rise.
The White House argues that by cutting the corporate tax rate from 35 percent to 20 percent, household income would jump by an average of $4,000 a year. Aside from the misleading math (average incomes include Warren Buffett’s as well as his secretary’s) there’s no reason to expect 5 percent growth in household income. Economists generally agree that even 3 percent sustained growth is optimistic.
Growth-by-tax-cuts didn’t happen under Reagan, nor when George W. Bush tried it. And it won’t happen under Trump. We’re more likely to see what happened in Kansas after dramatic tax cuts were enacted in 2012: an economic catastrophe that had to be remedied with higher taxes to balance revenue losses.
Gov. Sam Brownback’s top consultant on that tax plan: Art Laffer.
I suppose an additional task, in taking care of them both, was for Miss Beechie to drive the sisters where they needed to go. But she was a horrible driver. Although I do not know that she ever got any tickets, or was in any motor vehicle accidents, everybody knew to stay out of her way. She went careening all over the road. One day Mama was on her way to pick me up from my lesson and she saw Miss Beechie zigzagging all over the road. Literally. We all suspected she couldn’t see well enough to drive and we often wondered why didn’t somebody take her driver’s license. But drive around town she did. The sisters owned an older car which, I believe, was a 1930-something Plymouth. Miss Helen was the director of music at Rome’s First Presbyterian Church for 25 years. Miss Beechie drove them to church every Sunday morning. The only other driving she did was to the Colonial Grocery store, which many years ago was in the Central Plaza Shopping Center. She did not drive at night and so there were plenty of folks willing to give Miss Helen a ride to and from symphony rehearsal at Shorter every Tuesday night.
MY BROTHER STEVE. Much to his dismay, Miss Helen called my brother “Stevie.” He took piano lessons from Miss Helen when he was in high school and played trombone in the high school marching band. Miss Helen recruited him to play trombone in the Rome Symphony Orchestra. He participated in the orchestra for two Helen Dean Rhodes Jim Powell of Young Harris