The Corner

Economy & Business

Imperfect Ten

By

Amity Shlaes writes in favor of a 10 percent flat tax:

Experience, never mind scholarship, suggests that when a nation drops its tax rate substantially below that of other countries, it will draw commensurately substantial amounts of business, and extra tax revenues. No evidence has materialized that this phenomenon ceases when you drop your statutory top tax bracket by 75 percent, to 10 percent from the current 39.6. 

Comments

I don’t believe that experience or scholarship demonstrate that tax-rate reductions always or usually cause revenue to increase. If Shlaes’s argument were sound, though, why stop at 10 percent? Why not 1 percent? Why not 0.1 percent? A prudent fiscal conservatism can’t be the reason to hesitate: We’ve already left that behind by going for a 10 percent rate. So why not lower?

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Ramesh Ponnuru is a senior editor for National Review, a columnist for Bloomberg Opinion, a visiting fellow at the American Enterprise Institute, and a senior fellow at the National Review Institute.

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