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Catastrophe in 2013, Says Laffer

Written by Gary North on April 3, 2012

The Bush tax reductions will expire on January 1 unless Congress and the President extend them this year. Dr. Arthur Laffer predicts that American investors will move their income into this year. Next year, the economy will “fall off the cliff.” Laffer says.

In 2006, Laffer moved from California to Tennessee to escape the California state income tax. I made the same decision in 1975. I moved to a zero state income tax state. So did he.

He is convinced that California is a basket case because of its tax code and extensive regulations. Businessmen can move their companies to more business-friendly states.

Texas is one. There is no state income tax. The business environment is good. It has major top-notch universities. It has a growing population.

The politicians think they can tax without consequences. They can’t.

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14 thoughts on “Catastrophe in 2013, Says Laffer

  1. Dave Langdon says:

    I moved here from NY in 1979 and have never been happier, the folks are super friendly and help one another, the churches are there for you, the state controls it's spending , the hospitals are top notch, the roads are as good as they get, and people love their state and I do too. DC needs to stay out of Texas, we have got it right. God Bless us all.

  2. We moved from Minnesota to a small town in Wisconsin for the same reason. Since retiring I receive Social Security which is not taxed here and lowers our income tax bill significantly. My wife is an accounting manager at a private university in St Paul MN and she loves the small town people and lower taxes. and the roads are great too…

  3. Treetorn says:

    All Bunk. All taxes are regressive. Fiat money created from debt only gives an illusion of prosperity. The only way for tax cuts to raise revenue is because consumers borrow money that is created out of thin air and spend it, which temperarly grows the economy and which brings in more tax revenue and inflation. What really happened is that economy was inflated with the after effects felt much later. BUt what happens if not enough people borrow enough money to increase consumer and governemnt spending and inflation?.

  4. MontanaMEL says:

    Look at MONTANA…very "low" personal/state income taxes — NO SALES TAXES AT ALL…
    Wide open spaces… Buy and sell guns made within the state without Fed involvment…
    BEST BEEF IN THE WEST…. available direct from your local rancher!…custom processed for you.

    Left CA back in 98 … should have left in 78, when I moved back there from ALASKA…another great state!

  5. Mel–Shhhhhhhhh!! We don't need everybody knowing about Montana! I personally belong to the "Cold Cannibal Club", which advocates telling outsiders that it's 40 below zero for six months a year there, and cannibals roam the countryside in droves during the winter.

  6. Your pathetic ignorance of economics and history is not surprising. What IS surprising is your EAGERNESS to demonstrate this ignorance on a national/international forum.

  7. Blair Franconia, NH says:

    Cut taxes, man!

  8. What's really ignorant is your attack on Treetorn without citing a single source to back up your claims. You're just another idiotic flamer, aren't you?

  9. Litty, what is really ignorant is your attack on txRebel. Treetorn's first statement was stupid.: " All taxes are regressive"? Sounds like a wall street protester with a "skull full of mush". All is bunk from you two.

  10. I can’t believe you are arguing over something Bush put into play..LOL

  11. “Your pathetic ignorance of economics and history is not surprising. please educate me. Of course you have no idea of what your taking about.

    Without expanding the money supply all taxes are regressive since they take money out of of people’s pockets. And the less money people have to spend, the less things they can buy which means a smaller economy. This is econ 101.

    Government deficits do not drive economies, they destroy them. If they did the Soviet Union will still be around today. Central run economies cannot exist unless they inflate the money supply. Why, because they cannot overcome diminishing returns. They cannot compete with the private sector, which is the real reason why regulations exist; in order to protect political friends and allies from competition.

  12. Treetorn says:

    Call it what you will but the truth is what it is even if you do not like it.

  13. I wonder why Dr. Laffer doesn't get on board with the Fair Tax and endorse something similar for all the states? It's the least regressive, and because it leaves you with all your money, that's the best way to inject capital into the market- by giving it to people.

    To address the regressive tax issue above….income taxes in all forms are regressive, and hence bad. When you add in inflation caused by fiat money, regressive becomes oppressive.

  14. Some of the most ridiculous camera work I have seen. Did the cameraman have to use the restroom? S/He never stops dancing around; and s/he can't keep his/her finger off of the zoom button.