With the 2014 elections approaching, it is difficult not to wonder if the Republican Party will once again seem to have the same great paucity of ideas it has had in most recent elections. This is puzzling because there are so many possible concepts to use against the democrats in order to win elections.
One example of a potential winning issue is tax cuts.
Republicans could explain that the Ronald Reagan and George W. Bush tax cuts prove that tax rates are above the level where they produce maximum tax revenue.
This concept was explained by Arthur Laffer and called the Laffer curve. When tax rates are plotted on one axis and tax revenue on another axis, as tax rates rise from zero tax revenue increases up to a certain point; past that point tax revenue declines.
Both the Reagan and Bush tax cuts caused an increase in tax revenue to the federal government proving that before those tax cuts the tax rate was above the point producing maximum tax revenue to the federal government.
Republicans could cite this evidence that the federal tax rate is so high that it is causing so much less to be produced in the private sector that it is reducing tax revenue to the federal government.
The best possible solution would be to cut taxes and keep cutting until the last tax cut no longer produces an increase in tax revenue to the federal government.
Ronald Reagan cut the top tax rates from 70% to 50 % in 1981 and from 50% to 28% in 1986. These tax cuts stimulated the economy enough that tax revenue doubled during Ronald Reagan’s time in office.
Why not simply go to a flat rate 20% income tax with a 20% deduction allowed, eliminate the current cumbersome tax code and see how much government revenue increases. If government revenue increases in the first or second year after this flat rate is put in place, drop the tax rate to 15% and if federal government tax revenue continues to increase continue dropping the tax rate at 1% a year until cutting taxes no longer produces an increase in tax revenue.
Democrats would be put on the spot of having to argue against giving the American people tax relief, stimulating the economy and increasing tax revenue to the federal government.