Do you hear that? No? Listen closer. There. That. That, coming from Louisiana, is the sound of the end of trickle-down economics. Economists have known for a while that personal marginal tax rates, and in particular those on the rich, don’t seem to have much of an effect on the economy. As we wrote in September, even Reagan’s economist did not find any evidence that the Reagan recovery had come from the Reagan administration’s personal income tax cuts. Over the last four years, apostate Republican thinkers such as Bruce Bartlett and David Frum began to agree. Then most of America did. Even a group of CEOs of major corporations came around to the idea that raising tax rates on the rich would not hamper growth.
But no sitting Republican politician joined them, certainly none with big plans. Until this week. Bobby Jindal is both: governor of Louisiana and a strong prospect for 2016. On Monday he told Politico, “We cannot be, we must not be, the party that simply protects the rich so they get to keep their toys.” He also said the party shouldn’t tolerate “bizarre, offensive comments” or “dumbed-down conservatism.” Jindal’s tone isn’t completely new. In August of 2011, I listened to him address a closed gathering of the annual conference of the American Legislative Exchange Council in New Orleans. He dismissed anyone who questioned the president’s birth certificate, for example, with a great line: “I’m not worried about where Barack Obama is from. I’m worried about where he’s going.”