Wednesday, January 11, 2017

The Left's intransigence over tax cuts

Just home from an Australian sojourn  (during which I managed to read an entire book, a particularly dark Colleen McCullough book), here's an op-ed  from Gordon Campbell you might wish to comment on:

Ever since the world fell prey to the mullahs of the free market in the 1980s, no amount of real world evidence has managed dispel one key tenet of their economic faith. Namely, the idea that if you cut income taxes and taxes on small business, a wave of individual enterprise and entrepreneurial energy will thus be unleashed, profits will rise and – hey bingo! – the tax cuts will soon be paying for themselves via all that extra economic activity that this virtuous cycle will have set in train.
My off the cuff response:

Tax cuts are never significant because state-spending won't allow it.

Insignificant tax cuts will not stimulate entrepreneurship.

Typical governments are in the business of balancing budgets. REAL tax cuts are rare in the developed world.

What I do believe is that the Laffer Curve is real. You can only squeeze a lemon so much.


Don W said...

Gov'ts will never give substantial tax cuts as there would need to be substantial cuts in spending but that wouldn't be a popular move with the voters. I think the majority of people like a nanny state watching over them.The politicians and the bureaucrats like spending other peoples money and like having a say in how people live their lives and they also like their jobs. Substantial tax cuts aint going to happen any time soon.

Anonymous said...

We're about to see real tax cuts in the US. marginal corporate taxes down to 15% or less. Joyce will need to move NZ to 10% or less to remain competitive once US tarrifs kick in. That will make then leftists howl but you can be sure TRUMP knows he needs a real recovery to get re-elected.