Economic Stimulus Lies in Cutting Taxes
November 12, 2002
Some economists argue that cuts in Federal Reserve interest rates are not enough to get the U.S. economy back on a serious growth track. Despite a round of rate cutting that dates back to 2000, the economy and the stock market continue to languish.
What is needed, they contend, is for the Bush administration to accelerate and make permanent its tax cuts.
- Specific suggestions include lowering tax rates on all realized capital gains.
- Other fiscal measures that would help stimulate the economy include the deductibility of dividend payments for businesses -- which would also remove the tax incentives for excess corporate debt.
- The President should also fight for his Social Security reforms and radically extend NAFTA in pursuit of global free trade.
- As a partial offset to the economic drag of heightened domestic security programs, the President could push ahead on major tort reforms, while appointing more pro-growth judges.
Last week's elections, growth advocates point out, have given the Bush administration a rare window of political opportunity to accomplish just this kind of agenda.
Source: Arthur B. Laffer (Laffer Associates), "We've Cut Rates, Now Let's Cut Taxes," Wall Street Journal, November 11, 2002
For text (WSJ subscribers)
Browse more articles on Tax and Spending Issues