Arthur Laffer



Arthur Betz Laffer (born August 14, 1940) is an American economist who first gained prominence during the Reagan administration as a member of Reagan's Economic Policy Advisory Board (1981–89). Laffer is best known for the Laffer curve, an illustration of the theory that there exists some tax rate between 0% and 100% that will result in maximum tax revenue for governments. Laffer is Policy Co-Chairman (with Lawrence "Larry" Kudlow) of the Free Enterprise Fund.

Quotes 2000

 * Economic freedom is extraordinarily important. It’s the freedom to do with your resources what you believe you should do. My dream has always been to make poor people rich, not rich people poor.
 * John Seiler, “Let’s make Watts look like Beverly Hills,” Orange County Register (August 6, 2000)

Quotes 2004

 * While discussing President Ford's ‘WIN’ (Whip Inflation Now) proposal for tax increases, I supposedly grabbed my napkin and a pen and sketched a curve on the napkin illustrating the trade-off between tax rates and tax revenues. Wanniski named the trade-off ‘The Laffer Curve.’
 * “The Laffer Curve: Past, Present, and Future” The Heritage Foundation (June 1, 2004)


 * I used the so-called Laffer Curve all the time in my classes and with anyone else who would listen to me to illustrate the trade-off between tax rates and tax revenues.
 * “The Laffer Curve: Past, Present, and Future” The Heritage Foundation (June 1, 2004)


 * The Laffer Curve, by the way, was not invented by me.
 * “The Laffer Curve: Past, Present, and Future” The Heritage Foundation (June 1, 2004)


 * In 1994, Estonia became the first European country to adopt a flat tax, and its 26 percent flat tax dramatically energized what had been a faltering economy. Before adopting the flat tax, the Estonian economy was literally shrinking. In the eight years after 1994, Estonia experienced real economic growth - averaging 5.2 percent per year.
 * “Executive Summary: The Laffer Curve: Past, Present, and Future” The Heritage Foundation, (June 1, 2004)


 * People do not work, consume, or invest to pay taxes. They work and invest to earn after-tax income, and they consume to get the best buys after tax. Therefore, people are not concerned per se with taxes, but with after-tax results. Taxes and after-tax results are very similar, but have crucial differences.
 * “Executive Summary: The Laffer Curve: Past, Present, and Future” The Heritage Foundation, (June 1, 2004)


 * Countries with the highest tax rates probably also have the highest unemployment rates. High tax rates certainly do not guarantee fiscal solvency.
 * “Executive Summary: The Laffer Curve: Past, Present, and Future” The Heritage Foundation, (June 1, 2004)


 * Over the past 100 years, there have been three major periods of tax-rate cuts in the U.S.: the Harding-Coolidge cuts of the mid-1920s; the Kennedy cuts of the mid-1960s; and the Reagan cuts of the early 1980s. Each of these periods of tax cuts was remarkably successful as measured by virtually any public policy metric.
 * “Executive Summary: The Laffer Curve: Past, Present, and Future” The Heritage Foundation, (June 1, 2004)

Quotes 2007

 * The minimum wage is the black teenage unemployment act. It is the guaranteed way of holding the poor, the minorities and the disenfranchised out of the mainstream is if you price their original services too high.
 * “The Four Pillars of Reaganomics” The Heritage Foundation (January 16, 2007) from a November 13, 2006 speech.
 * You know, without China there is no Wal-Mart and without Wal-Mart there is no middle class and lower class prosperity in the United States.
 * “The Four Pillars of Reaganomics” The Heritage Foundation (January 16, 2007) from a November 13, 2006 speech.


 * Sound money is the sine qua non of a prosperous society.
 * “The Four Pillars of Reaganomics” The Heritage Foundation (January 16, 2007) from a November 13, 2006 speech.


 * Which would you rather have, capital lined up on your borders, trying to get into your country or trying to get out of your country? We are the capital magnet of this planet and we are the savior for not only people, for not only freedom, but also for capital.
 * “The Four Pillars of Reaganomics” The Heritage Foundation (January 16, 2007) from a November 13, 2006 speech


 * The trade deficit is the capital surplus and don't ever think of having a capital surplus as being a bad thing for our country.
 * “The Four Pillars of Reaganomics” The Heritage Foundation (January 16, 2007) from a November 13, 2006 speech

Quotes 2009

 * If you like the post office and the Department of Motor Vehicles and you think they're run well, just wait till you see Medicare, Medicaid and health care done by the government.
 * CNN Newsroom (August 4, 2009)

Quotes 2010

 * Resources don’t miraculously materialize out of thin air,… there is no free lunch.
 * Return to Prosperity: How America Can Regain Its Economic Superpower Status, Simon and Schuster, (2010) p. 42
 * And you can’t have a prosperous economy when the government is way overspending, raising tax rates, printing too much money, over regulating and restricting free trade. It just can’t be done.
 * “The Journal Editorial Report”, Fox News (June 12, 2010)


 * In the 1990's, we had the largest cut in government spending as a share of GDP in the history of the U.S. In the 1990's, we were doing free trade, we passed NAFTA, we went through there. We were for lowering interest rates and controlling money far better. And we weren't regulating nearly as much. We had welfare reform and all of those wonderful things. We had the biggest tax cut in our nation's history. Any comparison between today and the 1990's, it's totally inappropriate. Bill Clinton, as bad a person as he was, was a good president.
 * “The Journal Editorial Report”, Fox News (June 12, 2010)

Quotes 2011

 * You can never bail someone out of trouble without putting someone else into trouble.
 * Steve Nichols, [https://www.iushorizon.com/5177/news/economist-evaluates-spending-theories/ “Economist evaluates spending theories” The Horizon, Indiana University Southeast (March 2, 2011), speech occurred on Feb. 23, 2011


 * Stimulus packages don’t work. Every president that I have ever heard of has wanted a free lunch. They just don’t get it.
 * “Economist evaluates spending theories” The Horizon, Indiana University Southeast (March 2, 2011), speech occurred on Feb. 23, 2011

Quotes 2012

 * I don’t think we have to do it by government spending. My view is I’ve never heard of a poor person spending himself into prosperity. The government doesn’t create resources. The government redistributes them, and it redistributes them from workers and producers to people they get the resources based on some characteristic of the work effort. So what you really need to do is I think you need to incentivize producers, and what you need to go along, and my way of going would be Simpson-Bowles. Something to lower the tax rates, broaden the base, get rid of the loopholes. I mean really get a production base that officially starts, and that’s the way you really get out of this depression. The way we did in the Eighties to be honest with you.
 * HBO’s Real Time with Bill Maher Guests: Arthur Laffer and Paul Krugman] (May 25, 2012) episode no. 250


 * As my former colleague Milton Friedman used to say, ‘Government spending is taxation, pure and simple.’ Governments, when they spend the money, not only add to demand, they also reduce demand by taking the resources from the rest of society.
 * “The Laffer Curve and the Failure of Stimulus Spending” IEA Current Controversies Paper No. 38 (November 2012), lecture delivered to the Institute of Economic Affairs (IEA)(27 June 2012)


 * Government doesn’t create resources. Government redistributes resources. For everyone the government bails out, there is someone they put into trouble dollar for dollar. You can’t bail someone out of trouble without putting someone else into trouble.
 * “The Laffer Curve and the Failure of Stimulus Spending” IEA Current Controversies Paper No. 38 (November 2012), lecture delivered to the Institute of Economic Affairs (IEA) (27 June 2012)


 * Governments are raising taxes for austerity and that doesn’t work. Poor people cannot spend themselves into wealth and governments cannot tax their economies into prosperity. If you tax people who work, and pay people who don’t work, don’t be surprised if you find a lot of people not working…
 * “Reagan will come back: Interview with Arthur Laffer” (24 December 2012), Interview conducted by Economiaendostardes in Spain (16 December 2012)


 * Both sides have a bad incentive. The people you tax, who do work, they are going to stop working. The people who learn to live getting income without working, they are going to work less too.
 * “Reagan will come back: Interview with Arthur Laffer” (24 December 2012), Interview conducted by Economiaendostardes in Spain (16 December 2012)


 * Have you ever heard of a poor person spending himself into prosperity?
 * “Reagan will come back: Interview with Arthur Laffer” (24 December 2012), Interview conducted by Economiaendostardes in Spain (16 December 2012)


 * It's not Republican, it's not Democrat. Honestly, it's not liberal, it's not conservative ... It's economics … If you tax people who work and you pay people who don't work, don't be surprised when you get a lot of people not working.
 * “Economist Art Laffer On How to Fix California” Reason TV (April 10, 2012)

Quotes 2013

 * California is the highest-tax state in the nation and has been for a long time. It has the highest paid teachers in the nation, by far — $400 a month more than New Jersey — and yet California is the third lowest state on test scores for fourth and eighth grade English and math in the nation, and has been at the low level for a long, long time.
 * Paul Solman “How Low Can They Go? Arthur Laffer Defends Slashing State Income Taxes”, PBS News Hour (Aug. 1, 2013)


 * The states that have large in-migrations of Hispanics are Florida, Texas and California. And Florida and Texas are way above average in educational achievement, while California’s the lowest, just about.
 * Paul Solman “How Low Can They Go? Arthur Laffer Defends Slashing State Income Taxes”, PBS News Hour (Aug. 1, 2013)


 * As my former colleague Milton Friedman often said, ‘Government spending is taxation.’ Beyond the essential services government provides — such as roads, courts, schools, police and fire services, and the military — government spending doesn’t actually create resources. It just redistributes resources. For every beneficiary of government largesse, there’s someone who pays for that largesse.
 * Arthur Laffer: cuts succeeded where stimulus failed” The Spectator (26 October 2013)


 * The notion of a Keynesian spending multiplier is right out of an Aesop fable. And who ever heard of a poor person spending himself into prosperity? No one!
 * Arthur Laffer: cuts succeeded where stimulus failed” The Spectator (26 October 2013)


 * Nations with the greatest stimulus spending had the deepest recessions — while those with the least stimulus spending performed the best. The bigger the spending stimulus, the slower the recovery. I also showed historically that spending has never been associated with faster growth of the US economy.
 * Arthur Laffer: cuts succeeded where stimulus failed” The Spectator (26 October 2013)


 * In the 1970s, the more Congress spent, the higher unemployment rose, and it was not until government spending and taxes were cut in the early 1980s that unemployment started its long-term decline.
 * Arthur Laffer: cuts succeeded where stimulus failed” The Spectator (26 October 2013)

Quotes 2015

 * People don’t work to pay taxes, they work to consume.
 * Jim McTague, “How Arthur Laffer Would End Trade Warfare" Barron’s (Feb. 13, 2015)


 * Whoever heard of a poor man spending himself into wealth? It’s dumb. But we try stimulus spending all of the time.
 * Jim McTague,“How Arthur Laffer Would End Trade Warfare" Barron’s (Feb. 13, 2015)

Quotes 2018

 * You can't grow an economy, frankly, by over-taxing it.
 * “Art Laffer: Can't grow an economy by over-taxing it” Fox Business, (Aug. 3, 2018)


 * Don’t confuse fiscal discipline with party label. All those parties are all fiscally unsound. I mean, every Republican wants to spend more. Every Democrat wants to spend more. It is not their money… They’re spending your money and my money.
 * “Art Laffer: Can't grow an economy by over-taxing it” Fox Business, (Aug. 3, 2018)

Quotes 2019

 * Rise the minimum wage is the best way of hurting the poor.
 * “Art Laffer: Raising the minimum wage is the best way to hurt the poor” Fox Business (Aug. 6, 2019)


 * I have never heard of an economy being taxed into prosperity.
 * “Art Laffer: Raising the minimum wage is the best way to hurt the poor” Fox Business (Aug. 6, 2019)

About Arthur Laffer

 * The idea of cutting tax rates to spur business comes from the economist behind Ronald Reagan’s ‘Reaganomics’ tax cuts, Arthur Laffer… The Laffer Curve delivers a simple, seemingly obvious message: When the tax rate is zero percent, government will collect nothing from the earnings it taxes. When the tax rate is 100 percent, the curve also shows the government collecting zero revenue because there will presumably be no earnings: who would work if they kept absolutely none of what they earned?
 * Paul Solman “How Low Can They Go? Arthur Laffer Defends Slashing State Income Taxes”, PBS News Hour (Aug. 1, 2013)


 * Laffer, 74, is best remembered for the ‘Laffer Curve,’ which he scribbled on a napkin in 1974 to illustrate the negative effect of high tax rates on government revenues. If you hike taxes beyond a certain rate—a sweet spot, so to speak—then you end up collecting less revenue, he argued.
 * Jim McTague, “How Arthur Laffer Would End Trade Warfare” Barron’s (Feb. 13, 2015)


 * It just isn't going to work, and it's very interesting that the man who invented this type of what I call a voodoo economic policy is Art Laffer, a California economist.
 * George H. W. Bush, Speech at Carnegie Mellon University (10 April 1980)