Ezra claims that we shouldn't try to compete with Ireland and Greece on taxation because . . . "But that's nothing compared the odd idea that we have to kick the legs out of our revenue collection in order to fend off challenges from...Greece and Ireland. Operating costs are cheaper in smaller, less advanced countries, and much cheaper in smaller, much less advanced countries." Ireland is the richest country in Europe, except for Luxembourg, which is basically one big tax-advantaged bank. Its per-capita GDP is nearly as high as America's. In 1980, the year before Ireland cut its corporate income tax, the country's GDP was half the size of America's. I agree--why would we want to emulate soaring growth?
He also argues for narrowing the tax base and raising the rates, though that's probably not how he thinks of it:
I've argued often on this blog that given how much income is concentrated in the hands of the rich, you can cut taxes for the majority of the country, raise taxes on a small slice of wealthy Americans, and raise revenue, even as the average American's tax bill goes down. As Leonhardt argues, the relentless march of wealth accumulation -- the rich getting much richer, year by year -- made this truer in 2008 then it was in 2007, truer in 2007 then in 2006, and a helluva lot truer in 2006 then it was in 1993.
High taxes on a narrow base are about the opposite of optimal tax theory. This is not because economists are mean, cruel people who are primarily interested in serving their corporate overlords, but rather because the narrower the base, and the higher the rates, the more sharply the marginal returns to rate increases diminish.