Laffer’s Case, 1933 version 

“We have found in applying the income tax that where you were conservative in the upper brackets you received more money than you did where you put a real high tax in those brackets.” John J. Cochran, Member of Congress from Missouri, December 14, 1933.[1]

Art Laffer points  earlier: “The Laffer Curve, by the way, was not invented by me. For example, Ibn Khaldun, a 14th century Muslim philosopher, wrote in his work The Muqaddimah: ‘It should be known that at the beginning of the dynasty, taxation yields a large revenue from small assessments. At the end of the dynasty, taxation yields a small revenue from large assessments.’”

Now to 1933 again, when Cochran went on: “I say if we are going to make a success of this we are going to have to put good whiskey with in the reach of the poor man. If you don’t do that, Mr. Bootlegger remains in the picture.”

You don’t have to be a supply sider to agree that tax rates can be so high as to defeat their purpose.

Cochran, a Democrat, lost to Harry S. Truman for the Democratic nomination for U.S. Senator in 1934, but returned to the House after the 1936 election.

 

[1] Tax on Intoxicating Liquor, Hearings Before the Committee on Ways and Means, House of Representatives and the Committee on Finance, United States Senate, 73d Congress, Interim, 1st and 2d Sessions, page 260. This work can be found behind the Lexis paywall, and in libraries. At the UNC Library, for instance, it bears call # Y4.W36:L66.

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Author: patoglesby

From 1982 to 1990, I worked in tax policy for Committees of the United States Congress. In recent years, I was Adjunct Lecturer at UNC-Chapel Hill's Business School and then Adjunct Professor at its Law School.

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