Archive for August 8, 2012
Marketplace, a public radio program, has been covering Wealth and Poverty issues on its programs for several months. On July 26th, a segment titled “Arthur Laffer on income inequality, raising taxes” was broadcast. The audio can be downloaded here. Following is an excerpt from the transcript:
Horwich: Many economists will say the data is extremely inconclusive in practice as to how marginal tax changes actually affect personal and business activity. What makes you so sure?
Laffer: Because basically, these economists you talk about never worked in the real world. They’re just looking at the econometrics and the data there. If you ever go and look at what’s being recommended from the CPA firms, from financial planners. If you actually look at how they go through, do their tax returns — believe me, they are more focused on their taxes than you and I are on their taxes.
Horwich: But am I right that I just heard you criticize economists for actually looking at the data and making their decisions based on that?
Laffer: No, no, not looking at the data. I think it’s wonderful to look at the data. But I think it’s really silly to look at this accurate data and not make any judgments beyond those aggregate data
I was especially struck by this last statement about judgment versus data. It sounded to me that Laffer has made the judgment to ignore the data! (more…)