In The WSJ, Art Laffer explains that tax compliance adds an additional 30% to the cost of federal taxes and advocates a flat tax to reduce complexity.
At NRO, Kevin Williamson reports that repealing the Bush tax cuts for higher earners would raise $80 billion per year, in the context of a $1.6 trillion annual deficit.
The Journaleditorializes that raising taxes on the rich will have a modest impact on the budget.
Consider the Internal Revenue Service's income tax statistics for 2008, the latest year for which data are available. The top 1% of taxpayers—those with salaries, dividends and capital gains roughly above about $380,000—paid 38% of taxes. But assume that tax policy confiscated all the taxable income of all the "millionaires and billionaires" Mr. Obama singled out. That yields merely about $938 billion, which is sand on the beach amid the $4 trillion White House budget, a $1.65 trillion deficit, and spending at 25% as a share of the economy, a post-World War II record.
On TNR, Jonathan Chait counters Laffer with the claim that lower tax rates are not necessary to lower compliance costs.
From The WSJ, James Taranto skewers Walter Mondale’s call for higher tax rates.
Cato’s Alan Reynolds discusses tax rates on the Tara Servatius radio show.
At Econlog, David Henderson critiques one aspect of David Cay Johnston’s recent attack on supply-side economics.
But if he wanted to inform the reader without misleading, he would have presented the data on the percent of all federal taxes paid by the top 1 percent. In their book, Public Finance, 9th edition, Harvey S. Rosen and Ted Gayer, give a table showing that in 2005 [and things haven't changed much since then] the top one percent paid 27.6 percent of all federal taxes.
At COAL, Paul Krugman suggests the US can comfortably handle tax rates that absorb 23 percent of GDP, up from the historical 18.3 percent average.
On RCM, Joe Calhoun wonders if commodities have reached their top.
At Asia Times, David Goldman suggests the economy may lapse back to deflation. More on the theme, here.
In The WSJ, Cato’s Alan Reynolds refutes the President’s tax-the-rich rhetoric:
It is not as though we have never tried high tax rates before. From 1951 to 1963, the lowest tax rate was 20% to 22% and the highest was 91% to 92%. The top capital gains tax rate approached 40% in 1976-77. Aside from cyclical swings, however, the ratio of individual income tax receipts to GDP has always remained about 8% of GDP.
The individual income tax brought in 7.8% of GDP from 1952 to 1979 when the top tax rate ranged from 70% to 92%, 8% of GDP from 1993 to 1996 when the top tax rate was 39.6%, and 8.1% from 1988 to 1990 when the highest individual income tax rate was 28%. Mr. Obama's hope that raising only the highest tax rates could keep individual tax receipts well above 9% of GDP has been repeatedly tested for more than six decades. It has always failed.
At NRO, Larry Kudlow wonders why the President has decided to move left on taxes.
The WSJexplains that raising taxes on the top two percent – even with a static analysis – wouldn’t fix the deficit.
On The Kudlow Report, U.S. Rep. Aaron Schock (IL) debates Robert Reich on the President’s tax hike proposal:
The new Laffer Center for Supply-Side Economics opens its doors with a report that finds tax code complexity costs 30% of the total income taxes collected.
From Forbes, Seth Lipsky wonders why Republicans aren’t talking about the falling dollar.
At MarketWatch, David Stockman lambasts the Federal Reserve.
In The Washington Post, George Will profiles Fed inflation hawk Tom Hoenig.
Also on Kudlow, David Goldman discusses inflation:
On Forbes, Louis Woodhill suggests Republicans should quit trying to create Social Security private accounts and focus on saving the existing program with stronger growth.
In an article printed in numerous alternative weeklies, former NYT reporter David Cay Johnston launches a lengthy assault on supply-side economics.
