Wednesday, 27 May 2009

Boudreaux on tax cuts

From a letter Don Boudreaux sent to the New York Times on the reasons for tax cuts:
By far, the chief economic reason for cutting taxes is to increase the return to productive activity - to increase the return to investment, to risk-taking, to creativity, to work. The economic justification for lower taxes rests squarely on the understanding that cutting marginal tax rates makes profitable many productive efforts, including hiring more workers, that are unprofitable at higher tax rates.
Is this so hard to understand? Will the minister of finance ever understand this? In the upcoming budget Matt Nolan is betting on
Future tax cuts to be postponed into the indefinite future
If Matt is right then may be the minster needs to have a chat with Don Boudreaux.

1 comment:

Mark Hubbard said...

I hope you get time to give your opinion on the budget tomorrow Paul.