Arthur Laffer's Growth Agenda: Congress are you listening?

Laffer discusses how the new congress can be on the growth side which we all are worried about.  Mr. Laffer is the chairman of Laffer Associates and co-author of "Return to Prosperity: How America Can Regain Its Economic Superpower Status" (Threshold, 2010).   He is also the chief Mastermind behind the Laffer curve, which presents the tax rates as a way to maximize revenues. 

His theory is that we are way to high.  Laffer, like myself is a big fan of Clinton and Reagan, who were in retrospect the two most supply side presidents that we have had in the last 50 years.  Way more than either GW Bush or Obama. 

I have taken the liberty to pick out the important parts.  Via WSJ:
1) The full extension of the Bush tax cuts. Of particular importance for employment is keeping the highest personal income tax rate at 35%, the capital gains tax rate at 15% and the dividend tax rate at 15%, while eliminating the estate tax permanently.

2) The full repeal of ObamaCare, which allows individuals to pay only five cents for each dollar of health care.

3) The cancellation of all spending that punishes those who produce and rewards those who don't.

...So the government should sell its stakes in public companies acquired via TARP, sell government-run enterprises that lose money (e.g., Amtrak and the Postal Service), end farm subsidies that pay people not to farm, cancel the rest of the stimulus and return all spending programs to their pre-stimulus levels. ...Congress should also continually examine spending in Afghanistan and Iraq. And it should return the duration of unemployment benefits to the standard 26 weeks, from the current 99 weeks.

4) The enactment of stalled free trade agreements with South Korea, Colombia and Panama.

Beyond 2012, the ideal growth agenda would include:

1) A true flat tax, a la Jerry Brown's proposal in 1992. Congress should replace all federal taxes (except sin taxes) with two flat-rate taxes, one on personal income and one on net business sales. The personal income tax would be on all forms of income: wage income, dividends, inheritance (as proposed by Democratic Rep. Jared Polis), and all capital gains. This tax code would remove loopholes and almost all deductions, and the static revenue rate would be around 11.5%.

2) Price stability. Congress should revise the Federal Reserve's mandate, making it serve only the goal of price stability (and not also full employment). In addition, the Fed should follow a monetary rule, targeting either the quantity of money or the price level.

3) Passage of a balanced budget amendment, without raising taxes.

4) Finally, saving the best for last, the mother of all supply-side reforms is incentive pay for politicians (which the comedian Jackie Mason called "putting the politicians on commission"). Washington must begin doing the same by creating an incentive structure that pays elected officials according to factors such as stock market performance and economic growth.

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