The tax rate increases reduce economic growth; they shrink the pie; they cause more poverty, more despair, more unemployment, which are all things government is trying to alleviate with spending.
Arthur LafferThere are 11 states in the United States that in the last 50 years instituted an income tax. So I looked at each of those 11 states over the last 50 years, and I took their current economic metrics and their metrics for the five years before they put in the progressive income tax... Every single state that introduced a progressive income tax has declined as an overall share of the U.S. economy.
Arthur LafferIt has always amazed me how tax cuts don't work until they take effect. Mr. Obama's experience with deferred tax rate increases will be the reverse. The economy will collapse in 2011.
Arthur LafferI mean, everyone agrees with stress tests for banks. I mean that's clear. But banks should do that on their own. And they should worry about their own capital functioning. That's what they should do. It shouldn't be a government function.
Arthur LafferLet me just try to give you sort of the intuitive one here on the stimulus funds. If you have a two-person economy - let's imagine we have two farms, and that's the whole world, just two farms. If one of those farmers gets unemployment benefits, who do you think pays for him? Am I going way over your heads today?
Arthur Laffer