I.O.U.S.A - Addison Wiggin [122]
Q: What about moving those machines to China? Lower wage areas?
Arthur Laffer: Nothing ’ s wrong with moving them to China. We need to have capital allocated on a worldwide basis based upon the after - tax return to the shareholders. And if countries change their policies, become more or less attractive, people are going to move capital. That ’ s why you have to be really competitive in the U.S.
That ’ s why I ’ m so terrifi ed about these anti - rich people and these politicians who are talking about raising taxes on the rich. Do you realize how uncompetitive that would make America? In the 1980s, when we cut tax rates, it was great, because everyone else was a Fabian socialist with massively high tax rates. It was a win/
win. Now that the rest of the world ’ s got lower tax rates than we have, if these yahoos go and raise the tax rates, it ’ s going to destroy the U.S. economy. Everyone ’ s going to want to pull their capital out of the U.S. and put it in other places like China and that low -
wage, low - tax - rate country, France. It ’ s scary to me when I see the Obamas, I see the Hillarys, I see the John Edwards speaking nonsense. If they have their way, we ’ re going to have one heck of a problem here in the United States.
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Steve Forbes
Steve Forbes ran in the presidential primaries in 1996 and 2000 on a campaign to establish a fl at income tax in America. The editor - in - chief of Forbes magazine and president and CEO of Forbes, Inc., found the time in his very busy schedule in 2005 to write a book on this subject: Flat Tax Revolution (Regnery Publishing, 2005).
Q: Mr. Forbes, in Flat Tax Revolution, you spoke about how taxes breed corruption. What do you mean when you say taxes breed corruption?
Steve Forbes: Well, the Federal Income Tax Code is the biggest source of corruption in Washington. Politicians know it ’ s a source of power because of its complexity. If you sit on a tax - writing committee, you ’ re going be guaranteed political contributions for your election cycle. As a result, half the lobbying revolves around trying to put changes and amendments into the tax code. Each bill has literally hundreds of amendments. Nobody knows what they really mean. They ’ re for special interest, special things to change in the code which is why the code now has nine million words.
Politicians love it because it ’ s a source of power. You have to go to them to amend the code, get relief or hit your competitors. So they love it, but the American people pay a price for it.
Q: People talk about the United States as an empire. Is the U.S. an empire? Why or why not?
Steve Forbes: Well, the United States is an empire of freedom. We think of empire as imperialistic cultures like the Roman Empire or the Persian Empire. But the United States is different. It is an empire of the human spirit where people search for opportunities.
The essence of the American Dream is allowing each of us and all of us the opportunity to discover and then develop our talents 245
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Interviews
to the fullest. That is what opportunity is about. As a result, the United States is not only a large land mass and one of the most populous countries in the world; it is also a place where people from all around the world come to and then, in a generation or two, become as American as anyone else. No other entity has been able to do that. Look around the world; look at the breakup of the Soviet Union, the confl ict in Lebanon, ethnic and communal fi ghting in other parts of the world. The United States has avoided those problems because we do have these basic principles, and when we adhere to them, we become part of the American empire.
Q: There ’ s this great experiment in freedom, and the republic has, particularly in recent years, had an extraordinary explosion in borrowing. How much of a threat is the national debt to the sovereignty of the country?
Steve Forbes: Well, the national debt in and of itself is not the problem to the