Some weeks ago, I tuned to the C- SPAN
book channel and was shocked to see Arthur Laffer still suggesting that lowering
tax rates could cause higher tax revenues.
That lie, told to Rumsfeld and Cheney over cocktails during Reagan’s
presidential campaign 5 decades ago, is responsible for our run-away national debt,
our unjust wealth distribution and irrational Republican success (Reagan, Bush
II, Trump) – irrational in that working-class voters would not have voted for
these three phonies had they known that lowering income-tax rates simply transfers
wealth from the national treasury to the richest people on earth, namely bond
holders. This has bankrupted the USA, in
that we must borrow from bond holders hence add to our debt to pay interest on existing
debt held by those same bond holders, a vicious cycle. That’s Arthur
Laffer’s legacy.
The details are as follows. From WWII to Reagan’s administration, we had
a top tax bracket at or above 70% and our national debt fell steadily from 90%
of GDP to 32% of GDP. We were paying our
WWII debt despite costs of the interstate highway system and two more wars.
As soon as Reagan lowered the top tax
bracket to and below 50%, our national debt began climbing above 32% of GDP, passing
100% of GDP in 2010 and reaching 122% of GDP today: a quadrupling of national debt. There was a period of diminishing national debt
in the late 90s, quickly stifled by Bush-II tax cuts. As expected from the Laffer/Reagan tax changes,
the wealthiest 1% of our citizens went from receiving 8% of national income in 1980 to receiving
18% of national income in 2010.
Reasonable people predicted much of this when the Laffer curve became national doctrine back in 1980. To the extent that wealthy bond holders are responsible for perpetuating Laffer’s errors, then it is abuse of power.
Instead of starving the poor or increasing the debt limit, it would be better to back off of the latest tax cut slightly.
For details see:
Addendum: The most important consequences of Laffer's "irrational Republican success (Reagan, Bush II, Trump)" is not the national debt, which can still be fixed; it is the growth of right-wing anti-intellectualism, making rational energy policy impossible. Instead of Jimmy Carter, we got Reagan who tore the solar panels off the White House roof. Instead of Al Gore who wanted to combat global warming, we got Bush II who started a criminal war out of spite. Instead of Hillary Clinton, we got ignorant sensationalist Trump. Instead of international family planning we got the gag rule and widespread food insecurity, immeasurable suffering and the population bomb spilling out of the southern continents.
