Hillary Clinton’s inadvertant call to lower taxes.

Here’s Steve Forbes highlighting a major but unreported economic gaffe by Sec. of State Hillary Clinton:

Secretary of State Hillary Clinton declared recently at the Brookings Institution, “The rich are not paying their fair share.”

She then went on to praise Brazil as the tax holy grail for the rest of the world: “Brazil has the highest tax-to-GDP rate in the Western Hemisphere and guess what—it’s growing like crazy.” At first blush those kinds of words must make her neosocialist boss, President Obama, jump for joy. But is the secretary of state actually a supply-side subversive?

Take a look at Brazil’s income tax rates—they are lower than ours. The highest rate is a mere 27.5%, far below our top federal rate of 35%, which, given the complexity of our tax code, is actually closer to 38%. Moreover, that exaction will climb to almost 43% come January.

Isn’t Brazil’s success an example of what Ronald Reagan and other tax cutters have always claimed: Lower rates generate more economic activity, which, in turn, generates more government revenue?

Sadly, for our beleaguered economy, Hillary Clinton and her staff had no idea that Brazil’s income tax rate on the rich is slightly lower than that levied even in Ronald Reagan’s heyday (28%), a rate Bill Clinton railed against when he was running for the White House.

Mrs. Clinton, Mr. Obama and the rest of the administration don’t grasp that the top 1% of income earners in the U.S. already pay about 40% of federal income tax receipts, and the top 5% pay some 60%. When President Reagan took office the top tax rate was 70%, with the highest income earners paying a mere 18% of federal income tax receipts. By the time Reagan had whacked the top rate down to 28%, the proportion paid by the rich had soared to well over 30%.
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Mrs. Clinton, Mr. Obama and their friends also have no conception of capital creation. Low tax rates encourage people to take risks on new businesses, products and services. While most of these fail, the handful that succeed generate vast amounts in new assets.