By Fred Barnes
Except from the Washington Examiner:
Laffer emerged as an influential figure in the 1970s as the champion of reducing income tax rates. He was a key player in the Reagan cuts of 1981 that touched off an economic boom lasting two decades. He struck again in 2017 by helping to shape Trump’s tax cut.
A week before the Senate was scheduled to vote, the issue of whether the cuts should be phased in gradually or go into effect immediately was undecided. Laffer told Republican senators he’d oppose the bill if they opted for spreading out the cuts.
The Reagan tax cut had been phased in over three years and Laffer felt this was a costly mistake. It allowed the economic downturn to continue through 1982 before the tax cut could spur a recovery. In 2017, the Senate wisely took Laffer’s advice and rejected a phase-in.
There’s a broader issue in all this that explains why Laffer, 78, is not a favorite of conventional, predominantly liberal economists. Tax cuts leave the job of economic growth to the private sector. Liberal economists prefer to give government that job. Tax cuts are not on their agenda. Tax hikes are.