Noted economist Arthur B. Laffer is reiterating his support for Republican presidential candidate Herman Cain’s controversial “9-9-9” tax reform plan, saying it would “right the wrongs of our federal tax code” and help produce new jobs.
Laffer is chairman of Laffer Associates and the Laffer Center for Supply-Side Economics and co-author of "Return to Prosperity: How America Can Regain Its Economic Superpower Status.”
In an editorial in Wednesday’s edition of The Wall Street Journal
, Laffer agrees with Cain’s contention that his plan — which would impose a 9 percent flat-rate personal income tax, a 9 percent tax on net business profits, and a 9 percent national tax on retail sales — is “revenue neutral” and would bring in the same revenue as the current system.
But Laffer asserts that it also would slash the cost of complying with the tax code and encourage high earners to pay taxes at lower rates rather than striving to avoid taxes at higher rates.
Laffer writes: “The whole purpose of a flat tax, à la 9-9-9, is to lower marginal tax rates and simplify the tax code. With lower marginal tax rates . . . both the demand for and the supply of labor and capital will increase. Output will soar, as will jobs.”
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