On the Right

New York, Feb. 24—Mr. Reagan’s proposals—an across-the-board 10 per cent per year tax cut going over a period of three years—came as partial relief after persistent news stories to the effect that he would not propose to Congress reduced taxes at the highest brackets. To do any such thing, his advisors are quoted as having finally persuaded him, would be to bring on political damage and jeopardize tax cuts altogether.

But President Reagan was true to his commitment to endorse the Kemp-Roth principle. Unhappily, what he did not do was to stress the critical point, the thing primarily to remember about the Laffer Curve, and the point made with such comprehensive brilliance in George Gilder’s new book Wealth and Poverty. It is that relief is most important at the higher tax rates. What is the marginal rate of taxation? is the single most relevant question to ask if you are an economic physician probing an anemic patient. The pity is that the greatest living political communicator did not take the opportunity to confront such arguments as Senator Kennedy and Mr. Mondale used to bring down the house at Madison Square Garden last summer during the Democratic Convention. There must have been fifty references to “rich men’s” tax bills. There were none directed at the question: Is it sound public policy to over-tax the rich if by doing so a) you reduce the prospects of the non-rich, and b) you reduce total revenues?

New York, Feb. 24—Mr. Reagan’s proposals—an across-the-board 10 per cent per year tax cut going over a period of three years—came as partial relief after persistent news stories to the effect that he would not propose to Congress reduced taxes at the highest brackets. To do any such thing, his advisors are quoted as having finally persuaded him, would be to bring on political damage and jeopardize tax cuts altogether.

But President Reagan was true to his commitment to endorse the Kemp-Roth principle. Unhappily, what he did not do was to stress the critical point, the thing primarily to remember about the Laffer Curve, and the point made with such comprehensive brilliance in George Gilder’s new book Wealth and Poverty. It is that relief is most important at the higher tax rates. What is the marginal rate of taxation? is the single most relevant question to ask if you are an economic physician probing an anemic patient. The pity is that the greatest living political communicator did not take the opportunity to confront such arguments as Senator Kennedy and Mr. Mondale used to bring down the house at Madison Square Garden last summer during the Democratic Convention. There must have been fifty references to “rich men’s” tax bills. There were none directed at the question: Is it sound public policy to over-tax the rich if by doing so a) you reduce the prospects of the non-rich, and b) you reduce total revenues?