A Conservative Argues Lafferism and Then Admits It May Not Be True
Irwin M. Stelzer at first seemed to be writing copy for John McCain:
It will be necessary for McCain to show that the recipients of Obama’s $1,000 gift will not be better off, and might indeed be worse off after the income transfer is completed. How could this be? Taxes change behavior. By raising rates on upper income payers, Obama is reducing their incentive to work and take risks. The income tax increase is not all that he has in mind for them. He plans to increase their payroll taxes, the taxes they pay on dividends received and capital gains earned, and on any transfers they might have in mind to their kith and kin when they shuffle off this mortal coil. If the aggregate of these additional taxes substantially diminishes incentives to set up a small business of the sort that has created most of the new jobs in recent decades, the $1,000 tax rebate will be more than offset by the consequences of reduced growth and new business formation.
Oh boy – the standard supply-side silliness but before any one of us on the left decide to go after this spin, note Stelzer later writes:
There are two problems with this counterpunch. The first is that we have no idea whether it is true. The McCain campaign has shown little taste for doing the sort of empirical work on which the Obama team thrives. The second is that this is just the sort of exercise that McCain finds unappealing.
While I love the candor of the first counterpunch, let me object to the second one as McCain has been touting all sorts of supply-side silliness sine a shred of empirical evidence.