, Columnist
Tax Cuts Don't Work Miracles
The Laffer curve has found new life in state capitals.
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The idea that states do better when they cut income taxes and attract businesses and people is fundamental to conservative economic thinking. It's an appealing notion -- even if the supporting evidence is scant -- and goes a long way toward explaining why states such as Ohio, Michigan and Kansas are pushing to reduce or even eliminate local income taxes.
Among the most vocal advocates of this theory is Arthur Laffer, the economist whose work in the 1970s and 1980s popularized one of the bedrock principles of supply-side economics: Tax cuts pay for themselves by stimulating the economy, leading to higher government revenue.