Republican presidential candidate Newt Gingrich’s tax plan is “significantly better” than the one rival Mitt Romney proposes, renowned economist Arthur Laffer writes in an Op-Ed in The Wall Street Journal
“Mr. Gingrich has a significantly better plan than does Mr. Romney, and he has twice before been instrumental in implementing a successful tax plan on a national level — once when he served in Congress as a Reagan supporter in the 1980s and again when he was President Clinton's partner as Speaker of the House of Representatives in the 1990s. During both of these periods the economy prospered incredibly — in good part because of Mr. Gingrich.”
Laffer notes that the best way for government to raise revenue “is a broad-based, low-rate flat tax.”
Such a tax should give individuals and companies the fewest reasons to avoid taxes and the fewest way to do so. He writes that Gingrich’s proposal of an optional 15 percent flat tax for individuals and 12.5 flat tax for business have both been tested.
“Hong Kong, where there has been a 15 percent flat income tax on individuals since 1947, is truly a shining city on the hill and one of the most prosperous cities in history. Ireland's 12.5 percent flat business income tax propelled the Emerald Isle out of two and a half centuries of poverty.”
Meanwhile, former Massachusetts Gov. Romney’s tax proposals — they include eliminating the inheritance tax; reducing the corporate tax rate to 25 percent; and extending the current tax rates on personal income, interest, dividends, and capital gains — “don’t have the boldness or internal integrity of Mr. Gingrich's personal and business flat taxes.”
“Mr. Gingrich's tax proposal is not revenue-neutral, nor should it be,” Laffer writes. “If there's one truism in fiscal policy, it's this: Wasteful spending will always rise to the level of revenues. Whether you're in Greece, Washington, D.C., or California, overspending is a prosperity killer of the first order. Mr. Gingrich's flat tax proposals — along with his proposed balanced budget amendment — would put a quick stop to overspending and return America to fiscal soundness. No other candidate comes close to doing this.”
© 2013 Newsmax. All rights reserved.