Famed economist endorses Black for Tennessee governor

Famed economist endorses Black for Tennessee governor

September 14th, 2017 by Staff Report in Politics State

FILE - In this May 24, 2017, file photo, Rep. Diane Black, R-Tenn., presides over a House Budget Committee meeting in Washington. Black announced on Wednesday, Aug. 2, 2017, that she is joining the Tennessee governor's race. (AP Photo/Jacquelyn Martin, file)

Photo by The Associated Press /Times Free Press.

NASHVILLE — Arthur Laffer, former economic advisor to President Ronald Reagan, is placing his 2018 political bet in the Tennessee gubernatorial race.

"There's no one more qualified and prepared to lead Tennessee into a new era of prosperity than [U.S. Rep.] Diane Black."

In his statement, released by the Black campaign, Laffer said the Republican "knows exactly how to keep Tennessee's economy growing rapidly by ensuring that Tennessee keeps tax rates low while paying its bills and protecting its taxpayers."

Laffer noted that he moved from California to Tennessee 11 years ago "for these very reasons, and I couldn't be happier with my adopted home state."

The conservative "supply-side" economist is best known nationally for his "Laffer Curve" theory. It's named after the simple graph he drew to illustrate his argument that increasing tax rates beyond a certain level becomes counter-productive when it comes to raising tax revenue. If taxes are too high, revenues will sink, Laffer argues.

Reagan bought into that view wholeheartedly in the 1980s, and his cuts and economic policy became known as "Reaganomics." Laffer also advised British Prime Minister Margaret Thatcher, and Republican President Donald Trump is said to be keeping Laffer's views in his mind on a pending federal tax overhaul effort.

A number of economists, however, dispute Laffer's theory.

Black, who is U.S. House Budget Committee chairman, said Laffer "has the greatest fiscal policy track record of the last 40 years. I am honored to have his endorsement and look forward to working with him to put conservative economic principles to work in Tennessee. My team will focus on bringing jobs, low taxes and prosperity to every corner of Tennessee."

Laffer, a favorite of the conservative Republicans who control the Tennessee General Assembly, has advocated successfully at various times before legislative committees on issues including abolishing the estate tax and the Hall Income tax on stock and bond interest.

Earlier this year, opponents of Republican Gov. Bill Haslam's IMPROVE Act invited Laffer to testify about his views on the bill that boosted gas and diesel taxes for roads while cutting taxes on 517 corporate manufacturers in the state. In its final version it also cut the state's sales tax on food sold in groceries by a full percentage point.

Laffer told lawmakers he generally doesn't like increasing taxes but was willing to accept fuel tax increases if the bill's cuts on corporate taxes exceeded increases.

But the economist was cool to cutting sales taxes on food, calling it "silly pandering that's not helping the poor."