El Laffer Curvo
Spain figures out that if you really want enough tax revenues to pay for government services you need low rates, simple compliance, and broad reach. In other words, don’t make a few people pay a lot, but make a lot of people pay a little. At least my friend Arthur Laffer’s insights are being paid attention to somewhere while they’re being ignored in his own country. I doff my hat to the great man, and await the time when the U.S. relearns this lesson.
“It comes at a time of renewed market confidence in the Spanish economy, which has seen a surge in foreign investors buying into both sovereign bonds and the Madrid stock market. Spain emerged from recession last year but continues to suffer from towering levels of debt and unemployment.
“Details of the tax plan have yet to be finalised, but Madrid has made clear it wants to simplify the system and make tax collection more efficient. At the heart of the overhaul will be an election-friendly move to lower marginal rates on income and corporate tax. The headline reductions will be balanced by steps to broaden the tax base, mostly by eliminating some of the exemptions and deductions that currently litter the system.
““In Spain we have a system with high nominal rates but we collect only a small amount of taxes in relation to our gross domestic product and the overall wealth of the country. There is a problem with efficiency in the system. Fraud is an issue but it is also about the way the system works,” Cristóbal Montoro, Spain’s budget minister, said.
“He pledged to “improve tax revenues while lowering tax rates. We want to have a fiscal system that makes it more attractive to invest and makes the country more competitive”.”
Jerry Bowyer is a Forbes contributor, contributing editor of AffluentInvestor.com, and Senior Fellow in Business Economics at The Center for Cultural Leadership.
Jerry has compiled an impressive record as a leading thinker in finance and economics. He worked as an auditor and a tax consultant with Arthur Anderson, as Vice President of the Beechwood Company which is the family office associated with Federated Investors, and has consulted in various privatization efforts for Allegheny County, Pennsylvania. He founded the influential economic think tank, the Allegheny Institute, and has lectured extensively at universities, businesses and civic groups.
Jerry has been a member of three investment committees, among which is Benchmark Financial, Pittsburgh’s largest financial services firm. Jerry had been a regular commentator on Fox Business News and Fox News. He was formerly a CNBC Contributor, has guest-hosted “The Kudlow Report”, and has written for CNBC.com, National Review Online, and The Wall Street Journal, as well as many other publications. He is the author of The Bush Boom and more recently The Free Market Capitalist’s Survival Guide, published by HarperCollins. Jerry is the President of Bowyer Research.
Jerry consulted extensively with the Bush White House on matters pertaining to the recent economic crisis. He has been quoted in the New York Times, The Wall Street Journal, Forbes Magazine, The International Herald Tribune and various local newspapers. He has been a contributing editor of National Review Online, The New York Sun and Townhall Magazine. Jerry has hosted daily radio and TV programs and was one of the founding members of WQED’s On-Q Friday Roundtable. He has guest-hosted the Bill Bennett radio program as well as radio programs in Chicago, Dallas and Los Angeles.
Jerry is the former host of WorldView, a nationally syndicated Sunday-morning political talk show created on the model of Meet The Press. On WorldView, Jerry interviewed distinguished guests including the Vice President, Treasury Secretary, HUD Secretary, former Secretary of Sate Condoleezza Rice, former Presidential Advisor Carl Rove, former Attorney General Edwin Meese and publisher Steve Forbes.
Jerry has taught social ethics at Ottawa Theological Hall, public policy at Saint Vincent’s College, and guest lectured at Carnegie Mellon’s graduate Heinz School of Public Policy. In 1997 Jerry gave the commencement address at his alma mater, Robert Morris University. He was the youngest speaker in the history of the school, and the school received more requests for transcripts of Jerry’s speech than at any other time in its 120-year history.
Jerry lives in Pennsylvania with his wife, Susan, and the youngest three of their seven children.