Hudson Institute senior fellow Jeffrey Anderson is the latest conservative theorist to offer up a tax plan meant to boost economic spirits. While his focus on growth is encouraging, his belief that middle-class tax relief is the source of broad economic bliss leaves a little to be desired.
Writing in the Wall Street Journal this week, Anderson decried the tax plans offered up by Republican presidential hopefuls given his view that their “biggest beneficiaries would be the top 1%, and they would substantially increase the $19 trillion national debt.” Anderson’s assumptions don’t pair well with economic history.
As Reason Senior Fellow John Tamny explains, because the rich are flush with funds, they can take risks on the dynamic companies of tomorrow that are tautologically necessary for the prosperity that Anderson would like. Adam Smith was very clear that investment migrates away from economies that are stationary, and if the tax-cut focus is on the middle class, a more stationary economy will be ours. Such an economy will do little for the typical American whom Anderson would like to aid.
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