Today Larry Kudlow responds to David Brooks' call for new tax incentives and abandoning supply side economic policies and tax cuts to sustain economic growth. Kudlow predicts, it won't be pretty. I actually like David Brooks but think he doesn't know what he's talking about here either.
"........the estimable David Brooks, writing in today’s New York Times, says the Republicans need a new economic model. He writes, “Supply-side economics had a good run, but continual tax cuts can no longer be the centerpiece of Republican economic policy.”With respect, I do not agree. Deserting the 100-million-plus investor class, as Brooks suggests, would be economic and political folly. In today’s innovative high-tech world economy, where the global spread of free-market capitalism is the single biggest growth factor, saying “the entrepreneur is no longer king” is just plain wrong. New technologies and new companies are springing up everywhere, and it is precisely this Schumpeterian process that is the single-biggest driver of jobs, incomes, prosperity, and wealth creation. The targeted tax credits that David Brooks supports have no impact on incentives or economic growth. However, slashing marginal tax rates (as Rudy Giuliani and Fred Thompson propose) has the maximum economic-growth impact. "
Again, slashing marginal tax rates enlarges tax revenues the old fashion way, by increasing wealth, business and job creation, revenues. There's more money to tax at lower rates, and less money to tax at higher rates. But some experts and mediaiti can't or won't see it.
The video below is dedicated to Milton Friedman and Larry Kudlow who both know how to create an environment in which poor men may become rich. David Brooks doesn't and will have to sit this one out, along with John McCain, Barack Obama, the state of California, just to name a few.
Meanwhile, this is a fascinating idea and I have some friends who are behind it big time.