Stromata Blog: Arthur Laffer as a Leading Indicator

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Worth Reading (Fiction)

Mamet, David: Chicago: A Novel
In Roaring 20's Chicago, a Great War veteran turned hard-boiled reporter falls in love with the wrong woman and then seeks to find her killer.
Nelson DeMille: The Cuban Affair: A Novel
Two million dollars to charter a boat for a fishing tournament? A great way for the owner to pay off the boat's mortgage, but it turns out to include slipping into Castro's prison island in search of a lost (and perhaps imaginary) treasure.
Kate Atkinson: Life After Life: A Novel
Ursula Todd has the opportunity to relive her life, over and over and over, moving steadily through the Great War and its sequels and accumulating shards of memory.
Connie Willis: Crosstalk: A Novel
An empathy app leads to complications involving telepathy, Irish women and a true love that runs most unsmoothly. Classic Willis comedy.
Mark Steyn: The Prisoner of Windsor
In a 21st Century sequel to Anthony Hope, the heir to the Ruritanian throne must fill in for the kidnaped Prime Minister of Great Britain.
Tim Powers: My Brother's Keeper
Werewolves, the Brontë sisters, their wayward brother, their heroic dog and a conspiracy to unleash an almost dead deity.
Tim Powers: Declare: A Novel
An intricate Cold War fantasy that seems so plausible that one wonders whether it is the true story of why the Soviet Union rose and collapsed.
H.F.M. Prescott: The Man on a Donkey
Set during the Pilgrimage of Grace, this is the rare historical novel that captures the mindset of the actors. The hero, Robert Aske, was martyred in a way that makes burning at the stake look merciful.
Theodore Odrach: Wave of Terror
Based on the author's experiences when the Soviet Union occupied his homeland after the Stalin-Hitler Pact, this book melds Chekov and Solzhenitsyn. By stages, the isolated folk of the Pripyet Marshes learn that there are worse masters than their former Polish overlords.
Simon Montefiore: Sashenka: A Novel
Both grim and funny, this historical novel peers into the inner world of an upper class Russian girl turned loyal Bolshevik, highlighting her youthful fling at revolution-making in Petrograd, her fall from grace under Stalin, and an historian's effort, after the end of communism, to ascertain her fate.
Harry Turtledove: The Man with the Iron Heart
Can the U.S. maintain its resolve against a defeated enemy's terrorist campaign? Imagining a post-World War II Nazi insurgency, Harry Turtledove puts this question into a new context. As Reinhard von Heydrich's "werewolves" devastate Germany, war-weary Americans call for withdrawal, regardless of the consequences.
Neal Stephenson: Anathem
If you have not a smidgen of interest in how Platonic philosophy relates to the "many worlds" version of quantum mechanics, you still may like this novel, though you'll probably wish that the characters talked less. Persevere. After a slow start, the story grows compelling, and the intellectual dialogues turn out not to be digressions.
Alfred Duggan: Lord Geoffrey's Fancy
Perhaps the finest book of one of England's finest historical novelists. The setting is 13th Century Greece, where Crusaders fought each other and the shattered Byzantine Empire. The history is accurate, the writing graceful and the characters not merely modern people in fancy dress.
Rodney Bolt: History Play : The Lives and Afterlife of Christopher Marlowe
A pseudo-history springing from the premise that Shakespeare's flashy predecessor survived the famous Deptford brawl and fled to the continent, where he secretly wrote almost all of the Bard's works. A clever, tongue-in-cheek reworking of literary history that also recreates the milieu shared by many real Elizabethan exiles.
Charles W. Chesnutt: Stories, Novels, and Essays (Library of America, 131)
Fiction and essays by a black American writer who deserves a wider audience.
Harry Turtledove: Gunpowder Empire
Debut of a juvenile series set in parallel worlds. 22nd century teen siblings, trapped without adult aid in a besieged city, must cope with the bizarre (to them) customs and prejudices of a never-fallen Roman Empire.

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Wednesday, September 30, 2009

Arthur Laffer as a Leading Indicator

Today’s Wall Street Journal praises the California Tax Commission’s forthcoming proposal to revise the state’s tax system dramatically, replacing the current personal income, corporate income and state sales taxes with a semi-flat personal income tax and a VAT-like “business net receipts tax”.

A point that struck me was how closely this structure resembles the one proposed for the country by Arthur Laffer, Stephen Moore and Peter J. Tanous in their recent book, The End of Prosperity. They advocate a 12% flat income tax rate, with a large personal exemption and deductions only for mortgage interest, charitable contributions and rent, plus a 12% value added tax. All but a handful of other federal taxes would disappear. The upshot, according to their calculations, would be just as much government revenue as the present system produces and improved prospects for future economic growth.

Compare that to the California proposal:

The commission would replace the current, hugely complex system with one that has no sales tax (currently 5 percent) and no corporate income tax (currently 8.85 percent). Instead, it would have a Business Net Receipts Tax of 4 percent, which would tax what a business sells minus the cost of what they purchase from other firms. It is, therefore, very similar to the Value Added Tax widely used in Europe. . . .

The personal income tax would move sharply towards the flat-tax model. There would be a personal deduction of $22,500 for individuals and $45,000 for joint filers, and only three tax rates: 2.75 percent on taxable income up to $56,000 for a couple, 6.5 percent on income above $56,000, and 7.5 percent on income above $1 million. The current tax has seven tax rates and reaches as high as 10.55 percent. There would be deductions only for mortgages, property taxes, and charitable contributions. A family could fill out its state income-tax form in five minutes.

When I read The End of Prosperity, my reaction to the tax ideas was that they were pipe dreams. On the national level, where a fundamental alteration of the tax code would create huge transitional problems, that may be the case, but California’s choice is between bankruptcy and fundamental reform, not between a not-very-good tax system and a better one. Today California’s tax burden drives away the producers who pay taxes and thus leaves the state poorer in every sense, a perfect illustration of the Laffer Curve. (Dr. Laffer himself has relocated his prosperous consulting business from California to income tax-free Tennessee.) As the prospect draws nearer of California as a Third World polity, with entrepreneurs chased out and rent seekers in the ascendant, perhaps the legislators, or at least the voters, will concentrate their minds.

Posted by Tom Veal on Wednesday, September 30, 2009 at 03:41 PM in Current Affairs, Economics | Permalink

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Strange Tales for Strange Times
Get the stories shown below plus more in one inexpensive package.
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Intrigue, disguise and magic in Hellenistic Babylon.
Daimon Born: The First Adventure of Theagonistes
A being who dwells between the Moon and the Empyrean makes a (literal) impact on the Earth.
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Articles and Fiction

Worth Reading (Non-Fiction)

Sean McMeekin: Stalin's War: A New History of World War II
World War II as seen through the eyes of the leader who was most successful in attaining his objectives, despite starting the war with severe weaknesses and a catastrophic defeat. The author makes a particular point of how the U.S. and U.K. naively lavished aid on the USSR without seeking any return for their bounty. (*****)
Thomas Sowell: Knowledge and Decisions
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Laurent Murawiec: The Mind of Jihad
An exploration of the ideological and sociological roots of the cult of death that has grown up within (but is not entirely of) Islam. One of the half dozen books that anyone who wishes to understand our enemies ought to read and ponder. (*****)
John Emsley: Molecules of Murder: Criminal Molecules and Classic Cases
Murderers and their poisons - some commonplace, some exotic. But don't try these at home! (****)
Robert Drury: The Last Stand of Fox Company: A True Story of U.S. Marines in Combat
An hour-by-hour account of a Korean War Thermopylae. In December 1950, single Marine company holds back five battalions of Chinese and plays a key role in saving the overextended U.N. forces from destruction. (*****)
Bernard Lewis & Butzie Ellis Churchill: Islam: The Religion and the People
A nonpolemical overview of Islam, co-written by one of the leading Western authorities. Valuable as a corrective to misleading analogies with Christianity and for its analysis of how contact with the West has altered Moslem ideas and attitudes. (****)
Guy Sorman: Empire of Lies: The Truth About China in the Twenty-First Century
The author traveled through mainland China for a year, talking to religious and political dissenters and to the 80 percent of the population that has been left out of the "Chinese miracle". He paints a sobering, though anecdotal, picture of poverty, oppression, corruption and deceit, mostly ignored by a complaisant West. (****)
Robert G. Hoyland: Seeing Islam as Others Saw It: A Survey and Evaluation of Christian, Jewish and Zoroastrian Writings on Early Islam
Much of the conventional picture of Islam's first century has little basis in the evidence. This exhaustive survey uses non-Moslem writings of the 7th and 8th Centuries to illuminate this dim period, for which contemporary Moslem sources are rare and later accounts are often anachronistic. (*****)
Michael Yon: Moment of Truth in Iraq: How a New 'Greatest Generation' of American Soldiers is Turning Defeat and Disaster into Victory and Hope
While mainstream reporters keep their distance, Michael Yon covers the Iraqi campaign at close quarters. This book is his account on how an almost-lost war turned into a likely victory for the forces of civilization. (*****)
Douglas J. Feith: War and Decision: Inside the Pentagon at the Dawn of the War on Terrorism
The best account yet of the opening years of the War on Terror, with an insider's analysis of its successes and setbacks. The author, who was the number three man at the Defense Department from 2001 through 2005, supports his narrative with contemporary notes and declassified documents, distinguishing it from the typical Washington memoir. (*****)
Jonah Goldberg: Liberal Fascism: The Secret History of the American Left, From Mussolini to the Politics of Meaning
Except for the lively writing, this unearthing of the historical and intellectual links between American progressives and European fascists could be an academic study. "Progressive" has positive connotations for most people; here is why it shouldn't. (*****)
Andrew Rippin: Muslims: Their Religious Beliefs and Practices
An expert overview of the history, teachings and practice of Islam, with attention to the full spectrum of Moslem beliefs and only a minimum of academic jargon. Usefully dispels to myth that Islam emerged "in the full light of history" and has changed little since the 7th Century, though the author may be too optimistic about the prospects for moderates and modernizers. (*****)
Von Hardesty & Gene Eisman: Epic Rivalry: The Inside Story of the Soviet and American Space Race
The history of the Space Race through the first lunar landing, covering both the American and the Soviet space programs and showing why the USSR's early triumphs bore so little fruit. Real space buffs will find little that is new; for others, this is one of the best accounts available. (****)
Tara Ross & Joseph C. Smith, Jr.: Under God: George Washington and the Question of Church and State
Thomas Jefferson wasn't the only Founding Father with ideas about church-state relations. This study examines the views of George Washington, which, the authors argue, furnish more accurate insight into the meaning of the First Amendment. Included are all of the first President's significant statements about the role of religion in public life. (*****)
David Bellavia: House to House
An infantryman's searing memoir of the battle for Fallujah in November 2004, a crucial, hard-fought victory over al-Qa'eda and its allies. Whatever history thinks about the war in Iraq, this book is a future classic of military literature. (*****)
Philip Sabin: Lost Battles: Reconstructing the Great Clashes of the Ancient World
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Amity Shlaes: The Forgotten Man: A New History of the Great Depression
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Christopher Clark: Iron Kingdom: The Rise and Downfall of Prussia, 1600-1947
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Constantine Pleshakov: Stalin's Folly: The Tragic First Ten Days of WWII on the Eastern Front
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William E. Odom: The Collapse of the Soviet Military
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Charles Allen: God's Terrorists: The Wahhabi Cult And the Hidden Roots of Modern Jihad
Islamofascism didn't emerge from nowhere on 9/11. It continues a tradition of violent jihad against everyone, including mainstream Moslems, who refuses to bow to a pseudo-primitivist interpretation of Islam. This book traces, albeit with many digressions, the history of the Wahhabi and Salafist sects, with special emphasis on their impact in what is now Pakistan and on their spectacular growth in the 20th Century. They may be the future of Islam, in which case a long, bitter "clash of civilizations" is scarcely avoidable. (****)
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Andrew Lintott: The Constitution of the Roman Republic
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Martin Meredith: The Fate of Africa: From the Hopes of Freedom to the Heart of Despair
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Nicholas Wade: Before the Dawn : Recovering the Lost History of Our Ancestors
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Peter Heather: The Fall of the Roman Empire: A New History of Rome and the Barbarians
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Jung Chang & Jon Halliday: Mao : The Unknown Story
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Charles Spencer: Blenheim: Battle for Europe
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Arthur Cotterell: Chariot : The Astounding Rise and Fall of the World's First War Machine
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N. A. M. Rodger: The Safeguard of the Sea: A Naval History of Britain 660-1649
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J. E. Lendon: Soldiers and Ghosts : A History of Battle in Classical Antiquity
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Frank E. & Fritzie P. Manuel: Utopian Thought in the Western World
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Lynn Struve: Voices from the Ming-Qing Cataclysm: China in Tigers' Jaws
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John H. Fund: Stealing Elections: How Voter Fraud Threatens Our Democracy
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N. B. Aitchison: Macbeth: Man and Myth
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Burton Watson: Early Chinese Literature
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Michael Hicks: Richard III
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Henry Kamen: The Duke of Alba
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Jonathan M. House: Combined Arms Warfare in the Twentieth Century
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Donald E. Queller & Thomas F. Madden: The Fourth Crusade: The Conquest of Constantinople
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Justin Phillips: C. S. Lewis at the BBC: Messages of Hope in the Darkness of War
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Hugh Elton: Warfare in Roman Europe, AD 350-425
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Adrian Keith Goldsworthy: The Roman Army at War: 100 BC-AD 200
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Ibn Warraq: The Quest for the Historical Muhammad
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Ibn Warraq: The Origins of the Koran: Classic Essays on Islam's Holy Book
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Michael Cook: The Koran: A Very Short Introduction
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Richard J. Evans: The Coming of the Third Reich
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Michael Oren: Six Days of War: June 1967 and the Making of the Modern Middle East
The definitive account of the most crucial war in Israel's modern history. (*****)
Ronald Reagan: Reagan, In His Own Hand: The Writings of Ronald Reagan That Reveal His Revolutionary Vision for America
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Andrew Gurr: Playgoing in Shakespeare's London
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Susan Rose: Medieval Naval Warfare, 1000-1500
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Stephen Webb: If the Universe Is Teeming with Aliens... Where Is Everybody? Fifty Solutions to Fermi's Paradox and the Problem of Extraterrestrial Life
Wide-ranging introduction to the paradoxes arising from standard assumptions about technological progress, the abundance of sapient life and the age of planets. (****)
M. E. Durham: High Albania: A Victorian Traveller's Balkan Odyssey
A rugged Edwardian (not Victorian) lady's travels through Ottoman-ruled Albania. Colorful, with surprising empathy for the feud-ridden natives. (****)
Philip Jenkins: Hidden Gospels: How the Search for Jesus Lost Its Way
Solid, though slightly plodding, refutation of the bizarre "Jesus Seminar" theories about early Christian history. (****)
Walter E. Kaegi: Heraclius, Emperor of Byzantium
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R. J. Knecht: The French Civil Wars, 1562 - 1598
Succinct account of the Wars of Religion, considering the religious, social and economic factors that made them prolonged and indecisive. (****)
Noel Emmanuel Lenski: Failure of Empire: Valens and the Roman State in the Fourth Century A.D.
Life of the ruler who lost the crucial Battle of Adrianople (A.D. 378). Ably researched but marred by excessive hindsight and anachronistic view of how the Roman Empire functioned. (****)
J. E. Lendon: Empire of Honour: The Art of Government in the Roman World
Superb analysis of the mainsprings of Imperial Roman government. The author has an eye for the telling detail and empathy with a culture whose root assumptions differed from our own. (*****)
Donald Keene: Emperor of Japan
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Laurence Kelly: Diplomacy and Murder in Tehran : Alexander Griboyedov and the Tsar's Mission to the Shah of Persia
The brief life and tragic death of a brilliant soldier-playwright turned diplomat. (****)
Trevor Royle: Crimea: The Great Crimean War, 1854-1856
Covers all theaters of a conflict that was not limited to the Crimea. (****)
Richard Osgood & Sarah Monks: Bronze Age Warfare
Survey of the fortification sites, weapons finds and other archeological evidence relating to warfare in Bronze Age Europe. Stronger on description than interpretation but excellent at what it does. (****)
Kenneth M. Pollack: Arabs at War: Military Effectiveness, 1948-1991
Since 1948 Arab armies have been uniformly unsuccessful against non-Arab enemies. This thorough history and analysis tries to identify the reasons for this record of failure. (*****)
Azar Gat: A History of Military Thought: From the Enlightenment to the Cold War
Revisionist survey of military theory that tries, with mixed success, to show the impact of general ideological trends on ideas about how to fight wars. Strongest when discussing the 19th Century; hit and miss as it approaches the present. (****)

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Wednesday, September 30, 2009

Arthur Laffer as a Leading Indicator

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