The designer of Ronald Reagan’s economic plan is endorsing former Speaker Newt Gingrich for the Republican nomination for president. Arthur Laffer, chairman of Laffer Associates, and the Laffer Center for Supply-Side Economics, also co-authored “Return to Prosperity: How America Can Regain Its Economic Superpower Status” (Threshold, 2010) with Stephen Moore, senior economics writer for the Wall Street Journal editorial page, and a member of the Journal’s editorial board.
Mr. Laffer, who plans to join Mr. Gingrich in Iowa on Thursday for a formal announcement of his endorsement, said, “Newt has the best plan for jobs and economic growth of any candidate in the field.”
Mr. Laffer added:
Like Ronald Reagan’s tax cuts and pro-growth policies, Newt’s low individual and corporate tax rates, deregulation. and strong dollar monetary policies will create a boom of new investment and economic growth leading to the creation of tens of millions of new jobs over the next decade. Plus, Newt’s record of helping Ronald Reagan pass the Kemp Roth tax cuts and enacting the largest capital gains tax cut in history as speaker of the House shows he can get this plan passed and put it into action.
Mr. Gingrich’s economic plan includes an optional 15% flat tax, and a reduction in the corporate income tax to 12.5%. In October, Mr. Laffer‘s editorial entitled, “Cain’s Stimulating ‘9-9-9’ Tax Reform,” was published in the Wall Street Journal. In his supportive comments about the economic plan of then presidential candidate Herman Cain, Mr. Laffer observed that a flatter tax, similar to reforms made in the Tax Reform Act of 1986, would likely garner bipartisan support. He wrote:
With lower marginal tax rates (and boy will marginal tax rates be lower with the 9-9-9 plan), both the demand for and the supply of labor and capital will increase. Output will soar, as will jobs. Tax revenues will also increase enormously–not because tax rates have increased, but because marginal tax rates have decreased.