Tuesday, October 3, 2017

Four (Past) Presidents Debunk the Case for Higher Taxes

September 30, 2017 by Dan Mitchell  @ International Liberty

I’m currently in Iceland for a conference organized by the European Students for Liberty. I spoke earlier today on the case for lower taxes and I made six basic points.
Sadly, not everyone agrees with my views, either in Iceland or the United States.
Regarding the latter, Robert Samuelson expressed a contrary position last month when writing about the tax debate in the Washington Post.
…we need higher, not lower, taxes. …We are undertaxed. Government spending, led by the cost of retirees, regularly exceeds our tax intake.
After reading his column, I thought about putting together a detailed response. I was especially tempted to debunk the carbon tax, which is his preferred way of generating additional tax revenue.
But then it occurred to me that could make an “appeal to authority.” In my Iceland presentation today, I cited very wise words from four former presidents on tax policy. And their statements are all that we need to dismiss Samuelson’s column.

We’ll start with Thomas Jefferson, who argues for small government and against income taxation........To Read More.....

Tax Cuts, Cherry-Picked Data, and Interesting Admissions
There are several challenges when trying to analyze the impact of policy on economic performance.
One problem is isolating the impact of a specific policy. I like Switzerland’s spending cap, for instance, but to what extent is that policy responsible for the country’s admirable economic performance? Yes, I think the spending cap helps, but Switzerland also many other good policies such as a modest tax burden, private retirement accounts, open trade, and federalism.

Another problem is the honest and accurate use of data. You can make any nation look good or bad simply by choosing either growth years or recession years for analysis. This is known as “cherry-picking” data and I try to avoid this methodological sin by looking at multi-year periods (or, even better, multi-decade periods) when analyzing various policies.

But not everyone is careful.

Jason Furman, who was Chairman of the Council of Economic Advisers during Obama’s second term, has a column in today’s Wall Street Journal. What immediately struck me is how he cherry-picked data to bolster his claim that the government shouldn’t reduce its claim on taxpayers. Here’s his core argument...........To Read More....

An Important Lesson about Corporate Income Tax Rates, Double Taxation, Competitiveness, and Tax Revenue

October 1, 2017 by Dan Mitchell
For months, I’ve been arguing that the big reduction in the corporate tax rate is the most important part of Trump’s tax agenda.

But not because of politics or anything like that. Instead, my goal is to enable additional growth by shifting to a system that doesn’t do as much damage to investment and job creation. A lower rate is consistent with good theory, and there’s also recent research from Australia and Germany to support my position.

Especially since the United States is falling behind the rest of the world. America now has the highest corporate tax rate in the developed world and arguably may have the highest rate in the entire world.
Needless to say, this is a self-inflicted wound on U.S. competitiveness.

But since the numbers I’ve been sharing are now a few year’s old, let’s now update some of this data.
Check out these four charts from a new OECD annual report on tax policy changes (the some one that I cited a few days ago when explaining that European-sized government means a suffocating tax burden on the poor and middle class).

Here’s the grim data on the corporate income tax rate (the vertical blue bars). As you can see, the United wins the booby prize for having the highest rate..........To Read More....
 

No comments: