Unemployment Benefits Aren't Stimulus

Let's not reduce the incentive to find work. A federal tax holiday is a better way to cut the high jobless rate.

While many conservatives have called for tax cuts aimed at benefiting corporations and multimillionaires, economist Arthur Laffer — a former member of President Reagan’s Economic Policy Advisory Board — went a step further today.Writing in the Wall Street Journal, Laffer argued that the best way to stimulate the economy is to have “no federal taxes at all.” Here is what Laffer proposed to eliminate:

No income tax, no corporate profits tax, no capital gains tax, no estate tax, no payroll tax (FICA) either employee or employer, no Medicare or Medicaid taxes, no federal excise taxes, no tariffs, no federal taxes at all, which would have reduced federal revenues by $2.4 trillion annually. Can you imagine where employment would be today? How does a 2.5% unemployment rate sound?