Thursday night the Republican candidates for president held their debate on MSNBC. The following day, probable presidential contender Fred Thompson gave a speech at the Lincoln Club of Orange County dinner. Today, RealClearPolitics published Fred’s speech. Here’s a portion:
A lot of folks in Washington suffer from a big misconception about our economy. They confuse the well-being of our government with the wealth of our nation. Adam Smith pointed out the same problem in his day, when many governments mixed up how much money the king had with how well-off the country was.
Taxes are necessary. But they don’t make the country any better off. At best they simply move money from the private sector to the government. But taxes are also a burden on production, because they discourage people from working, saving, investing, and taking risks. Some economists have calculated that today each additional dollar collected by the government, by raising income-tax rates, makes the private sector as much as two dollars worse off.
To me this means one simple thing: tax rates should be as low as possible. This isn’t anything ideological, and it really isn’t some great insight. It’s common sense arithmetic.
That’s why the economy booms when taxes are cut. When the Kennedy tax cuts were passed in the 1960s, the economy boomed. When Reagan cut taxes in 1981, we went from economic malaise to a new morning in America. And when George Bush cut taxes in 2001, he took a declining economy he inherited to an economic expansion — despite 9-11, the NASDAQ bubble and corporate scandals.
The Democrats, of course, want to raise taxes. They only want to target the rich, they say. A word of advice to anyone in the middle class — don’t stand anywhere near that target. Wouldn’t it be great if, instead of worrying so much about how to divide the pie, we could work together on how to make the pie bigger?
Read the rest of Fred’s speech. In it he outlines his positions on a variety of issues, including globalization, securing our borders, and entitlements.