[This is another that I wrote several days ago, but am just getting around to posting.]
I mentioned, yesterday, that other people were doing a far better job than I of talking about the problems with Romney as a candidate. One that I found yesterday is this epic-length blog post by Kurt Eichenwald dismantling the entire economic argument for the GOP.
I really don't have a lot to add to it; it covers a lot of ground, very well. Really, it's well worth reading the whole thing.
The two things I think I want to mention are about the Laffer curve and about Reagan's tax increases.
We'll start with the Reagan tax increases. Wait, increases? Yes, as mentioned in the article, the TEFRA was a large tax increase. What he doesn't mention, was that it was needed to stabilize Social Security's finances. How well did it work? Well, Social Security started having surpluses immediately. Congress immediately used those surpluses by having Social Security buy T-Bills to finance the operations of the rest of the government. But the real reason I wanted to bring it up is that that also occurred right before the economy started booming, and there's reason to believe correlation, there. Not to say it was a bigger reason than the rate cuts, but it wasn't nothing, either.
About the Laffer curve, here's what I see as the key points. If you tax at 0%, revenue is zero. If you tax at 100%, revenue will similarly be zero (or very close; altruists might get some work done). So it's pretty obvious that there is some point in the middle that maximizes revenue. And pretty obvious that progressive marginal rates will push that maximum point higher. It's pretty tough to argue that current rates, already incredibly low historically (and Eichenwald does a decent job of pointing out how low, by comparing with Reagan-era rates. He neglects to mention Eisenhower-era rates (90% top marginal rate), though, which are also instructive).
Actually, let's look at tax rates for a bit. Here's a chart of top marginal tax rates, historically. Do tax rates really look high, now? They seem ludicrously low, to me. Ah, finally found it. Here's a chart with the full tax rate table under Eisenhower. Man, that would be painful for my family, but only because we're accustomed to paying so much less. Still think rates are high, though? How crippled was the economy by those tax rates? Yeah, it was extremely healthy.
The other point worth noting, though, is just how many different tax brackets there were. I'm not sure if that was a good thing, or bad, though.
The main point, though, is that, no matter what your political orientation, you should read that Eichenwald article.