“On the scale on which [tax cutting] is being tried, I'm a little apprehensive. I'm all for reduction of government expenditures but to anticipate it by reducing the rate of taxation before you have reduced expenditure is a very risky thing to do.”

— Friedrich Hayek

in "Business People; A Nobel Winner Assesses Reagan", The New York Times (1 December 1982)
1980s and later

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Friedrich Hayek 79

Austrian and British economist and Nobel Prize for Economic… 1899–1992

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“Undoubtedly, looking back, we nearly all allowed ourselves, for decades, to be frozen into rates of personal taxation which were ludicrously high…That frozen framework has been decisively cracked, not only by the prescripts of Chancellors but in the expectations of the people. It is one of the things for which the Government deserve credit…However, even beneficial revolutions have a strong tendency to breed their own excesses. There is now a real danger of the conventional wisdom about taxation, public expenditure and the duty of the state in relation to the distribution of rewards, swinging much too far in the opposite direction…I put in a strong reservation against the view, gaining ground a little dangerously I think, that the supreme duty of statesmanship is to reduce taxation.”

Roy Jenkins (1920–2003) British politician, historian and writer

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“Anybody can reduce taxes, but it is not so easy to stand in the gap and resist the passage of increasing appropriation bills which would make tax reduction impossible. It will be very easy to measure the strength of the attachment to reduced taxation by the power with which increased appropriations are resisted. If at the close of the present session the Congress has kept within the budget which I propose to present, it will then be possible to have a moderate amount of tax reduction and all the tax reform that the Congress may wish for during the next fiscal year. The country is now feeling the direct stimulus which came from the passage of the last revenue bill, and under the assurance of a reasonable system of taxation there is every prospect of an era of prosperity of unprecedented proportions. But it would be idle to expect any such results unless business can continue free from excess profits taxation and be accorded a system of surtaxes at rates which have for their object not the punishment of success or the discouragement of business, but the production of the greatest amount of revenue from large incomes. I am convinced that the larger incomes of the country would actually yield more revenue to the Government if the basis of taxation were scientifically revised downward. Moreover the effect of the present method of this taxation is to increase the cost of interest. on productive enterprise and to increase the burden of rent. It is altogether likely that such reduction would so encourage and stimulate investment that it would firmly establish our country in the economic leadership of the world.”

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“Corporate tax rates must also be cut to increase incentives and the availability of investment capital. The Government has already taken major steps this year to reduce business tax liability and to stimulate the modernization, replacement, and expansion of our productive plant and equipment.”

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Statement on Taxes
YouTube
2011-08-23
http://youtu.be/227YyBf7-KQ
2012-02-24
Sound Government

“In any case of the budget deficit the private sector of the economy receives more from government expenditure than it pays in taxes.”

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Source: Theory of Economic Dynamics (1965), Chapter 3, The Determinants of Profits, p. 51

“On the scale on which [tax cutting] is being tried, I'm a little apprehensive. I'm all for reduction of government expenditures but to anticipate it by reducing the rate of taxation before you have reduced expenditure is a very risky thing to do.”

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Friedrich Hayek 79

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