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Politics : Politics for Pros- moderated
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From: LindyBill4/4/2005 7:37:37 PM
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Respectfully Disagree
lkmp.blogspot.com
By Money Politic$

A recent Sunday New York Times opinion piece by reporter Anna Bernasek argues that there's no real evidence that lower tax-rates spur economic growth. She cites a couple of economists who purport to have done this research. So let me beg to differ in a very significant way.

First, I will cite the work of Harvard economists Martin Feldstein and Greg Mankiw, along with numerous articles published by the National Bureau of Economic Research. Then there's the work of Columbia economist Glenn Hubbard and Princeton economist Harvey Rosen. All show a high correlation between lower tax-rates and higher economic growth.

Then there's the Nobel prize-winning Edward Prescott of Arizona State and Robert Mundell of Columbia. Some will respond that these are Republican advisors.

There's also work from the Paris-based OECD, the IMF, and the Congressional Budget Office.

Then there's the real world evidence. Both the Reagan tax cuts and the George W. Bush tax cuts triggered economic growth. President Clinton raised taxes in his first term, but lowered them in his second term, contributing to a burst of investment and growth.

Russia and almost all the former Soviet bloc countries in East Europe are moving to low flat tax-rate systems. Mrs. Thatcher's tax cuts made Britain the strongest European Union economy, that is until Ireland replaced it with even lower tax-rates.

Years ago, Art Laffer and Victor Canto showed that low tax states in the U.S. badly outperformed high tax states. I will have more to say on this in future days, but for now, I wish to respectfully but forcefully disagree with Ms. Bernasek.
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