I recently added ABC’s This Week back to my Tivo since ABC took my veiled and tongue-in-cheek advice and jettisoned the talented but regrettably snooze-inducing Christiane Amanpour. (Great to have George S. back, but I’d love to see the awesome Jake Tapper in the host chair again.)
Today’s episode featured a mildly bullying interchange between Krugman and Carly Fiorina where he either completely misunderstood her point or purposely attempted to put misleading words in her mouth. In this process, he inadvertently validates the notion that our corporate tax rates are too high, and that the Laffer Curve is alive and well.
The topic of conversation was why U.S. corporations are moving their operations overseas. Check out this (edited) clip below:
Fiorina says our business tax rates are the highest in the world which is true (in the case of corporate rates):
Krugman aggressively attempts to “refute” her point by oddly changing the subject to tax receipts(??). While he is accurate in his assessment that receipts are comparatively low, (at least as a percentage of GDP) this completely validates Fiorina’s main point about how businesses will aggressively pursue avoidance strategies (which include moving overseas!).
Bottom line. High rates induce companies to move overseas, which results in lower receipts. Make rates way too high and you’ll see an obvious disconnect between the two numbers. Sounds like a classic manifestation of the Laffer Curve to me…