Reagan adviser Art Laffer says the IRS won’t target the wealthy

A former economic adviser to President Ronald Reagan says the Biden administration is wrong in its belief that bolstering the Internal Revenue Service with 87,000 additional agents will result in more tax collection from the wealthiest Americans.

“They have a lot of lawyers, they have a lot of accountants, they have a lot of different income specialists,” Art Laffer, the economist who served on the Economic Policy Advisory Council during the Reagan administration, said of the nation’s wealthiest citizens.

“They have a lot of favorite grapplers. They have a lot of lobbyists, they have a lot of influence,” Laffer told Just The News.

“They know the tax codes inside out and have all these things. I don’t care how many IRS people you go after them, you won’t get much more money from them.

President Biden signed the Inflation Reduction Act into law on Tuesday.

Laffer was a member of the Economic Policy Advisory Council during the Reagan administration.
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Biden and Democratic lawmakers say it would raise $737 billion in revenue by imposing a 15 percent minimum corporate tax as well as a 1 percent tax on stock buybacks. The money is intended to fund climate initiatives as well as reduce the cost of prescription drugs.

But Laffer thinks the middle class will bear the brunt of the projected tax increases.

“If you raise tax rates, you’ll find that the average tax revenue of the top 1 percent goes down, not up,” he said.

“And that’s because they’re using all these loopholes and all these tax havens.”

The Congressional Budget Office seems to agree with Laffer.

Laffer said he expects inflation to exceed 10% by November this year.
Laffer said he expects inflation to exceed 10% by November this year.
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The nonpartisan CBO released an analysis that estimated those earning less than $400,000 — the tax bracket Biden has promised not to penalize — would pay about $20 billion more in taxes over the next decade as a result of the legislation.

The Democratic-led Senate rejected an amendment to the bill proposed by Sen. Mike Crapo (R-Idaho) that would have sought to exempt taxpayers earning less than $400,000 from increased IRS scrutiny.

Democrats also say the bill will reduce the deficit and inflation, but Laffer believes higher consumer prices will remain for the foreseeable future.

“There’s no chance between now and Sunday, frankly, in my view of the world, that we’re not going to see inflation jump to over 10% percent as we go into [midterm] elections [this coming November]” he said at a conservative student meeting last month.

Inflation jumped 8.5% in July – slightly less than 9.1% in June. The rate at which consumer prices are rising has not been this high in four decades.

The Biden administration has been criticized for its “Orwellian” claim that July saw “0% inflation,” but Laffer believes there is some truth to that claim.

Laffer said the Biden administration was right to say July inflation was 0% -- thanks to lower gas and oil prices.
Laffer said the Biden administration was right to say July inflation was 0% — thanks to lower gas and oil prices.
AP

“The president, as you know, said inflation from last month — July by itself at 0%, which is true,” Laffer said.

“It’s true. Oil prices fell dramatically and were enough to offset the increase in other prices,” he said.

Laffer added, “But what he didn’t tell you is the month before — the June number — the number before July was 17+%.”

“So that’s the reason we look year-over-year because you get that volatility, those libraries up and down in certain months,” Laffer continued.

“But if you look at it over the whole year – this last survey, July was 8.5%, while the previous month it was 9.1%.”

“But it’s still an extremely large number.”

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