Elizabeth MacDonald of Forbes magazine revealed on CNBC’s Kudlow & Co. that she refers to the founding father of modern supply-side economics as “Saint Arthur Laffer,” since his economic reckonings have done so much good for the world. Larry Kudlow likes the monicker, and so do I. But over here at Bowyer Media’s central command, we call him King Arthur. Why? Because Arthur Laffer has both conquered his foes and liberated untold people. (Plus, “King Arthur” sounds cool.)
The realm of King Arthur has done well of late. Last week, the Laffer curve, a much maligned though powerful predictive tool, got another notch in its belt: Tax revenues hit the highest one-day point in U.S. history.
Of course, there’s a bit more to the story. President Bush cut tax rates in 2003, and tax revenues have been climbing ever since — a trajectory the Laffer curve predicts when tax rates are made less prohibitive. The process may seem counterintuitive, yes. But anybody who bet against it lost out.
Today, it’s still the fashion for American pundits and pols to snicker at the revenue-enhancing power of tax cuts. But while they laugh, the world at large is shifting toward what works. First it was Estonia going for a Forbesian flat tax. Then Germany elected the Rhineland’s answer to Margaret Thatcher. That was good for as far as it went, but now France? Yes, the people of Gaul found their inner Charlemagne and put tax-cutting Nicolas Sarkozy into office.
The realm King Arthur continues to widen.