The Economics Book

IN CONTEXT

FOCUS

Economic policy

KEY THINKERS

Robert Mundell (1932–)

Arthur Laffer (1940–)

BEFORE

1776 Adam Smith suggests that moderate taxes might bring in more revenue than high ones.

1803 French economist Jean-Baptiste Say argues that supply creates its own demand.

AFTER

1981 US President Ronald Reagan cuts top-rate tax and capital gains tax.

2003 US President George W. Bush ignores criticism from leading economists and pursues a policy of tax cuts.

2012 In January the US government deficit hits an unprecedented $15 trillion.

Common sense tells us that if a government wants to raise more money to spend on public services, it must raise taxes, however unpopular ...