Former Trump campaign advisor Arthur Laffer ’63 — who also advised President Ronald Reagan — argued in a debate with the Yale Political Union on Tuesday that the corporate income tax should be eliminated.
The debate, held at Sheffield-Sterling-Strathcona Hall, consisted of an opening speech by Laffer, followed by a Q&A and speeches by members of various YPU parties.
In addition to arguing that the corporate tax — a direct tax on the income or capital of a company — should be eliminated, Laffer emphasized during his opening speech that “all taxes are bad” and that they should be collected in the “least damaging fashion possible” and “spent in the most beneficial way possible.”
“When you cut tax rates in the range that we are talking about, you would get enormous growth in the United States economy,” Laffer said, to hisses from the left side of the room and apprecitative banging on the right.
In an interview with the News, Laffer emphasized that economics is “all about incentives,” saying that “if you want something you should tax it less and if you don’t want something, you should tax it more.”
While some party members expressed support for the corporate income tax, others said they agreed with Laffer’s stance.
“Consumers are more inelastic than producers, and suppliers can stop supplying if they are not generating the utility that they want,” said Sean-Michael Pigéon ’21, a member of the Party of the Right. “Ireland is one of the few countries that have lowered their income tax and this has allowed more businesses to move there.”
Vasileios-Plato Sioufas ’21, a member of the Federalist Party, also said he believes the corporate income tax should go down. A lower tax rate would provide additional incentives for wealth creation and benefit society as a whole, Sioufas said, adding that high tax rates are immoral.
But others disagreed. In response to a question from an audience member, Fausto Alexandro Hernandez Reyes Retana ’21, a member of the Conservative Party, said that if the redistribution of wealth is the goal, there should be a more progressive income tax, not one that lowers the wages of the workers.
And Dylan Hosmer-Quint ’18, a member of the Party of the Left, argued that tax cuts benefit the top 1 percent.
“I would like to cite the Bush administration with the tax cuts that caused a booming deficit,” Hosmer-Quint said. “Any sort of tax cut helps the top one percent and they don’t help anyone else.”
Ultimately, the debate fell to the side arguing to retain the corporate income tax — 23 people voted to keep the tax in place, while 22 voted to eliminate it. One participant abstained.
Isha Dalal | isha.dalal@yale.edu