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Monday, June 20, 2005

The Laffer Curve

Stephen Moore has a nice column at Opinion Journal today on how Arthur Laffer has again been proven correct as we analyze the after-effects of the Bush tax cuts.

Ben and Alan, you're free market libertarian types with heavy-duty economic training. Was Laffer right? I think so. I once did a constant dollar analysis of the federal revenues post the first big Reagan cut and saw a real increase year by year. Rates were cut and revenues went up. No lefty can believe it.

One more thing. Let's assume the revenues would be the same for a 15% rate and a 70% rate (I believe you'd collect a lot more with 15%, but let's accept it.). Wouldn't it be de facto better to charge 15%? Why are the lefties so hell-bent on high rates?

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