Blame supply-side for Europe’s woes

In response to Roger Dauchy’s Dec. 3 letter identifying European socialism as a plague that is destroying Europe and threatening the U.S. through the Obama administration, I find his argument passionate and partisan but devoid of facts.

One of many factual causations of Europe’s woes is lack of revenue. The challenged countries have over the past 30 years reduced their income tax rates and starved their governments at the altar of supply-side economics. Over the past 30 years top marginal tax rates in Ireland went from 77 percent to 41 percent; Greece 63 percent to 40 percent; Italy 72 to 40 percent. Mr. Dauchy’s Euro savior, Germany, had a much less severe reduction of tax rates, 56 to 47 percent.

Is it just a coincidence that during this same period the top U.S. marginal tax rate has gone from 70 to 35 percent? We are more like Greece than Germany, but for different reasons.

The decision for austerity in Europe is being imposed upon the people. It is not a sudden revelation. However, the new governments are not ideologically opposed to tax increases like the GOP. Spain is increasing their tax rates for 2011 on capital gains and raising the top marginal rate to 45 percent. Greece increases highest marginal rate to 45 percent and imposes a surcharge for 4 years of 3 percent of income. Italy increases marginal rate to 43 percent. Ireland imposed a temporary levy of up to 5 percent and increased its marginal tax rate.

Rather than creating the boogey man of European style socialism as the sole enemy, I think supply-side economic theory should also be culpable for European financial problems.

Next thing you know, Roger Dauchy will be blaming ACORN, Fannie Mae, Reverend Wright and Bill Ayers for the Euro collapse.

Patrick Cleary

Wheaton