Donald Trump would make a great US president because he can't be bought, says US economist Arthur Laffer.
The Republican Party stalwart and low-tax evangelist believes the property mogul has cut a swathe through US politics and represents the party's best chance of toppling Hilary Clinton.
"He's very disruptive to the party because he doesn't need money and all of these political contributors like to give money so they can buy influence," he told The Irish Times.
Dr Laffer was one of the principal architects behind Ronald Reagan’s low-tax revolution in the 1980s, known retrospectively as Reaganomics. He was in Dublin to speak at an event hosted by the employers group Ibec.
On Trump’s more outlandish comments on Muslims and Mexicans, he said: “Let me put it this way, he’s unfiltered. They are comments I wouldn’t make but they don’t make me think any less of him as a potential president. “
“I think of it as entertainment. I know you guys take it very personally but I just don’t.”
Dr Laffer believes the name-calling and innuendo that has characterised some much of the Republican contest stems from a consensus around policy.
“They can’t argue about issues because basically all the candidates agree on the issues.”
He sounded a note of caution about Florida senator Marco Rubio, however, on the grounds he had the highest tax and welfare spending plans.
Dr Laffer’s economic creed - as you might expect from a man dubbed as the father of supply-side economics - is centred on low taxes, spending restraints and minimal regulations.
His main contribution to the economics canon - the Laffer Curve - contends that there are diminishing returns beyond a certain “optimal” tax rate, effectively meaning governments can raise more by taxing less.
In his latest book, An Inquiry into the Nature and Causes of the Wealth of States, he sets out to prove that every US state that put up income taxes in the last 65 years has seen a reduction in the level and quality of social services.
“They’ve [the states who put up taxes] lost jobs, they’ve lost income and they have worse schools,” he said.
Asked to speculate on why the current Irish Government's promise of tax cuts flopped so badly in the recent election here, he said: "If that's the message that was rejected, I feel very sorry for Ireland. "
He said cutting taxes will not only generate more direct revenue but will create a healthier private sector, which will need less social services and unemployment benefit “because people have good, high-paying jobs”.
Laffer believes Ireland is trapped between following the US and Europe in terms of its tax code.
“Your corporate tax is terrific…looking at the business it is bringing in, but your income tax, that’s another story,” he said, clearly unimpressed with the 52 per cent top rate.
US taxes are “way too high”, he said, but Europe’s taxes and a complex system of regulation are off the charts.
His basic premise is that all taxes are bad but the sweet spot in terms of setting rates is when “the pain from the last dollar collected is a little less than the benefit derived the last dollar spent.. and then you stop.”
“Extending this out and you’ll make the economy worse,” he said. A low rate, broad-based, flat tax is the gold standard that governments should strive for, he said.
