Steve Forbes has an illuminating piece in today’s Wall Street Journal, “Hillary Clinton:Accidental Supply Sider.” His point is that Hillary made a huge mistake when she recently said that Brazil proved that high taxes are consistent with strong economic growth. Forbes points out that she was she was wrong on two counts. Factually wrong, because taxes in Brazil are lower than in the US, and theoretically wrong because (and here comes a point I have made over and over!) the private sector makes much better use of resources than the government does. Forbes writes, “Clinton/Obama statists will never grasp the truth that those who create wealth will almost always reinvest it far more productively than government bureaucrats.”
Big government apologists think that when tax rates are less than 100 percent, that means revenues are being “lost” to the government. The far more intelligent way of thinking about taxes is to see that almost everything the government taxes away is lost to the more creative, productive, and dynamic private sector.
