Something d-o-o economics
If you want your name to live forever in politics, come up with a reason why helping rich people is good for everybody. That’s what Arthur Laffer did in 1974, when he drew his famous curve on a napkin. The Laffer Curve illustrates the theory that lowering tax rates can sometimes increase overall tax revenues by stimulating economic growth. This argument makes sense, as far as it goes, but it doesn’t tell us much. To many people, though, the Laffer Curve means that cutting taxes raises revenue. That’s the argument Treasury Secretary Paul Mnuchin made this week to justify President Trump’s plan to dramatically reduce corporate taxes. Won’t lowering taxes add to the deficit? Nah. “The tax plan will pay for itself with economic growth,” Mnuchin said. Well then. That sounds fortuitous.
