Sunday, March 11, 2007

More Laffer Curve Laughers

Via Greg Mankiw, we find this National Review interview of Senator McCain by Ramesh Ponnuru. Greg refers us to this part of the Q&A (by far the worst on economic issues):

Ponnuru: If you could get the Democrats to agree, or at least to come to the table on entitlements or on tax simplification, are those circumstances under which you’d be willing to accept a tax increase?

Sen. McCain: No; no.

PONNURU: No circumstances?

Sen. McCain: No. None. None. Tax cuts, starting with Kennedy, as we all know, increase revenues. So what’s the argument for increasing taxes? If you get the opposite effect out of tax cuts?

Greg suggests two appropriate follow-up questions for McCain:
1. If you think the 2001 and 2003 tax cuts increased revenue, why did you vote against them?

2. If you think tax cuts increase revenue, why advocate spending restraint? Can't we pay for new spending programs with more tax cuts?

As Greg has announced that he's an economic advisor to Governor Romney, I'll be very curious to hear Romney's response to a direct question about the circumstances under which he would be willing to increase taxes if he's elected President.

The question that I would like to have answered by any policy maker who voted for the tax cuts and believes that they have increased revenues is:

Why did you make them so small?


paul a'barge said...

Why did you make them so small

Maybe he was working under the Goldilocks theory that neither too big nor too small would be just right.

Maybe a professor of economics would understand such a concept.

Then again, maybe not.

Christopher Taylor said...

I guess I'm just not as economically savvy as you Mr. a'barge, but what about the size of the tax cuts makes you believe they were "just right?" I mean obviously, by definition "too small" and "too big" are extremes, but is there any reason to believe that the work that was done was "just right?"

Could they not have been any bigger? Would that have, in your opinion, been bad? Based on what?

Attila said...

"I'll take Tax Policy for $200, Alex."

"The answer is 'Static revenue analysis.'"


"Why did you make them so small?"

Fritz said...

Why not ask about hidden taxes? Too many federal programs cost shift costs on the private sector, like Medicare & Medicaid.

Edward Charles Ponzi Jr. said...

I suppose you could make the case that less actual government could have real economic benefits -- but less taxes and the same amount of gov. spending?

I think the debt numbers speak for themselves.

But many of the people who advocate this nonsense know damned well that THEY are benefiting now and EVERYONE pays later.