THE LAFFER CURVE

Arthur Laffer recently wrote a defense of the corporate VAT tax substitution being proposed by Rand Paul and Ted Cruz.

Dr. Laffer understands that there are conservative opponents of his flat VAT tax plan. He doesn't seem to know why. I know why. The reason is expressed by Dr. Laffer.

The U.S. government should collect taxes in the most efficient way possible so as to do the least damage to the economy.

This sounds good. In fact, it is conceptually inaccurate and highly misleading. The opponents of Dr. Laffer's famous curve -- I am among them -- line up against "the most efficient way possible" for the government to collect taxes. Why? Because we do not want efficient tax collection. We want inefficient tax collection. Why? Because we want the least damage done to personal liberty. (The economy can look out for itself.)

Good government is inefficient government in the realm of tax collection. Here, waste is good -- morally and technically.