Low tax rates: now even bureaucracies agree
When one of the world's leading bureaucracies endorses low tax rates you know the evidence in favor of them is truly undeniable.
International bureaucracies usually disdain free-market policies. So it’s remarkable to see the World Bank issuing a new report, Paying Taxes: The Global Picture, that unambiguously endorses low tax rates, simple tax systems and even the Laffer Curve.
The report, co-published with PriceWaterhouseCoopers, ranks business tax regimes in 175 nations. The Maldives, a small and obscure island nation ranks first, but other nations to earn top-10 rankings are more familiar, including Ireland, Singapore, Hong Kong and Switzerland. The United States, unfortunately, ranks 63rd, trailing countries such as Syria, Uganda and Mongolia.
America’s tax rate is too high according to the report, but the biggest obstacle to U.S. competitiveness is tax complexity. With 5,100 pages of “primary tax legislation,” the burden of red tape is exceeded by only four other nations.
I blame tax cuts.
This is good news. The last holdouts against lower tax rates are finally giving in to reality. Hopefully the only people opposing lower tax rates in the near future will be the American left (who will never accept them).
This is why the World Bank report is newsworthy. For all intents and purposes, the World Bank has broken ranks with the other international organizations and decided to accept real-world evidence about the benefits of low tax rates and fundamental tax reform. It even endorsed Laffer Curve analysis because of the overwhelming evidence that low tax rates result in more taxable income.
That may sound like common sense, but congressional Republicans managed to hold power for 12 years without incorporating the Laffer Curve into revenue-estimating models. Who would have thought that the World Bank would wind up with better views on tax policy than the Party of Ronald Reagan?
It would be most unfortunate if the Democrats tried to undo all of the good that has been accomplished via tax rate cuts over the past 25 years by trying to hike taxes. They need only look back at the tax hikes of 1990 to see what an awful idea that would be.
International bureaucracies usually disdain free-market policies. So it’s remarkable to see the World Bank issuing a new report, Paying Taxes: The Global Picture, that unambiguously endorses low tax rates, simple tax systems and even the Laffer Curve.
The report, co-published with PriceWaterhouseCoopers, ranks business tax regimes in 175 nations. The Maldives, a small and obscure island nation ranks first, but other nations to earn top-10 rankings are more familiar, including Ireland, Singapore, Hong Kong and Switzerland. The United States, unfortunately, ranks 63rd, trailing countries such as Syria, Uganda and Mongolia.
America’s tax rate is too high according to the report, but the biggest obstacle to U.S. competitiveness is tax complexity. With 5,100 pages of “primary tax legislation,” the burden of red tape is exceeded by only four other nations.
I blame tax cuts.
This is good news. The last holdouts against lower tax rates are finally giving in to reality. Hopefully the only people opposing lower tax rates in the near future will be the American left (who will never accept them).
This is why the World Bank report is newsworthy. For all intents and purposes, the World Bank has broken ranks with the other international organizations and decided to accept real-world evidence about the benefits of low tax rates and fundamental tax reform. It even endorsed Laffer Curve analysis because of the overwhelming evidence that low tax rates result in more taxable income.
That may sound like common sense, but congressional Republicans managed to hold power for 12 years without incorporating the Laffer Curve into revenue-estimating models. Who would have thought that the World Bank would wind up with better views on tax policy than the Party of Ronald Reagan?
It would be most unfortunate if the Democrats tried to undo all of the good that has been accomplished via tax rate cuts over the past 25 years by trying to hike taxes. They need only look back at the tax hikes of 1990 to see what an awful idea that would be.