Reagan-era tax reform obsolete?
Economist Art Laffer responds
- Duration 7:29
- Date Oct 13, 2012
Economist Art Laffer responds
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Welcome back everybody from our -- -- couple where they are.
You know not here the powers -- -- does not hear everyone waiting out this -- see what happens and and we -- try to have a conversation with you.
Both on this show.
And electronically on FaceBook on our web site.
Questions you have I've personally did answer and I enjoy it on the -- fast typist when it movies -- a little fingers that's.
-- and a lot of you have been midseason basic issues.
On our FaceBook -- let's have a flat tax.
So all Americans pay their -- then limit the deductions on high income earners a system where the bottom -- -- present.
Pay no income tax seems unfair well sexy the bottom 47%.
But your point is extremely well taken John I think lost in this argument about.
You know whose noses out of joint because you offended retirees.
Or military tied so who genuinely.
I had done a lot for this country are ready pay taxes already and are offended when they're -- looked upon as being you know.
That the -- to the government.
I think leaving that aside we have to wonder how it's gotten to the point where nearly half Americans are not paying income taxes at all.
You're quite right to say that many pay payroll taxes that others have already paid into the system and -- -- and I just got out of grad schools that figure was 22%.
22% nothing income taxes how -- affected it doubles I know what you're saying you -- you just got to edit a school's juniors felt.
Look at navy.
Two decades ago but you know what I mean and art Laffer does as well and art that's the point right Ronald Reagan's economics and golly you know if they get to about.
What that says and the limits you have that a government where.
We are now looking at at.
And very few paying the freight for it we got to do some -- that.
Why did we do I think we do but.
Let me just tell you -- you say the powers that be -- not a Washington as long as you're there the powers that be are in Washington the product.
Well yeah well I tell you what I got you on the phone in now what can -- it.
And that -- did I get that sense that you know that we talk about it simplified tax on its -- about what what.
People is it getting more into the pool.
So so we can expand.
I think I think that's what Paul Ryan should just said that Joseph Biden because Joseph Biden voted early and expect that if you know you -- -- right -- -- -- from 50% to 48%.
The Democrats have -- let this fight over the years.
Jerry Brown when he ran for president -- he wanted a 100% of all income earners the -- income tax at the exact same rights.
And he came in second in the primary in 1992.
In the Democratic Party.
So you know everyone knows that you should have a low rate flat tax for economic growth prosperity and or fairness.
-- -- You know they don't there's something.
I'm sorry but there's also Sotheby's said it just everyone having scan it again but the outlook that sort of -- -- -- to -- detail or.
But but so -- at it's you that's at stake in in the game.
-- -- to sit in the game you have a more personal vested interest in that game.
Of course that's the way it should be.
I mean if all of our country at least not just one group's country that faces the -- -- everyone should support the country as a whole no one has ever made better off field by pulling a follower American down.
And every Americans better -- whenever anyone -- -- made better off we all share the burden of taxation to be a low rate flat fact.
That's the way to go to create prosperity for all Americans and you know I don't understand all of those other parts of these guys are doing -- just crazy.
And the the fiscal -- Me.
It really is one I just don't work hard at what it's.
One of the reasons wife and people are surprised that that -- you like Bill Clinton the Democrat list on my tech is that.
He stimulated business people always focus on that hike -- rates but it did -- that the richest.
But he immediately was cutting.
Investor related rates are -- and added that senator and that spurred people forgot that that but that's why.
These raids that it's not so much across supported government rate hikes have a look at that that word I'm not a fan of any of them.
But I'm really worried about these business -- -- dividends attacks -- -- income rate from 15%.
It's -- about something with a surtax for that the reds could be up to 44%.
It if that doesn't inhibit that investing and lead the taxi to something really bad in the side.
Well I you know I think it's already led to a -- what but I didn't hear -- and your commentary today as.
That people already have that income and the 2012.
As bad as this year book.
It's really much worse than a book because people -- -- -- come -- 2013 of the 2012.
And what we get back clip that clip gonna be really really serious individual yeah.
-- -- that -- mutual fund redemptions -- other words people who are taking their money out now.
Maybe in large part in preparation that that's of course are under the surface did you see more of that happening as we get closer to year end.
Oh yes and if you look at 2010.
-- -- that we extended the tax cut.
In 2000 and much smaller one -- now.
There was a huge drop in GDP from the -- left up with this out of them for the first half of 2011.
I believe all of that was due to the fiscal clip.
Even though we -- extend the tax cut people -- prepared at a private so I'm looking for a bad 2013.
No matter what happens.
So let's go do another scenario.
And is so negative ones presence reelected but he's dealing with the Republican senate.
Mitt Romney's elected dealing with a Republican senate Mitt Romney's elected dealing with still a democratic senate -- audit on outdoors configurations.
Nor -- C with Syria off from Lockheed Martin the former CEO saying.
A scenario where you most likely cobbled together a deal.
Where you extended the rates for everybody.
And so they have a set is with a Republican president -- -- it's possible under a democratic one when I see happening.
I don't think it but yeah I don't think it's very possible under under Barack Obama I really don't I mean he's a professor he knows he's right no matter how much contradict.
-- And you know it's it's really truly believe via the direct pipeline to god and frankly I think he's wrong -- all of this stuff -- -- very nice man but he's wrong.
And -- he is the -- reelected I think it will have a real problem of the economy for years the -- But you know there is such -- thing is negotiating -- alluded -- -- boss Ronald Reagan who was quite open to.
Getting some if not -- somebody want -- because it be getting none of what he wanted.
Yes and you know that's what we get what Jerry brown and Jerry Brown's tax cut which was a flat tax rate across the board on everyone's.
No -- just replacing all.
Federal taxes would do flat rate that that.
It was not revenue neutral that had a little bit of positive revenue and I supported that all the way because of the tremendous.
Boom that we get by getting rid of the progressive income tax and all of these capital -- And I think it would have been wonderful.
So you know we need to compromise on all the issues but not until we have a good position I don't -- -- compromise before you we've been discard the start the discussion.
I think home -- I think Grover.
When it's available but it's an election aren't you and -- -- -- what your people I mean you know you don't give away your fallback position before you start.
And we -- say art -- thank you very much like.