June 28, 2010

HILLARY GOES BRAZILIAN?:

Hillary Clinton: Accidental Supply-Sider: She's right about Brazil's growth. She's wrong about its tax rates. (STEVE FORBES, 6/28/10, Forbes)

Secretary of State Hillary Clinton ... went on to praise Brazil as the tax holy grail for the rest of the world: "Brazil has the highest tax-to-GDP rate in the Western Hemisphere and guess what—it's growing like crazy." At first blush those kinds of words must make her neosocialist boss, President Obama, jump for joy. But is the secretary of state actually a supply-side subversive?

Take a look at Brazil's income tax rates—they are lower than ours. The highest rate is a mere 27.5%, far below our top federal rate of 35%, which, given the complexity of our tax code, is actually closer to 38%. Moreover, that exaction will climb to almost 43% come January.

Isn't Brazil's success an example of what Ronald Reagan and other tax cutters have always claimed: Lower rates generate more economic activity, which, in turn, generates more government revenue?

Posted by Orrin Judd at June 28, 2010 6:03 PM
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