Liberals think that you just have to raise taxes to increase tax revenue. This is known in some circles as linear thinking. It does not occur to them that increasing taxes affects productive behavior.
Liberals think that you just have to raise taxes to increase tax revenue. This is known in some circles as linear thinking. It does not occur to them that increasing taxes affects productive behavior.Instead, we’re discussing today how lawmakers in other nations are beginning to recognize that it’s absurdly inaccurate to predict the revenue impact of changes in tax rates without also trying to measure what happens to taxable income
The natural disposition is always to believe. It is acquired wisdom and experience only that teach incredulity, and they very seldom teach it enough. The wisest and most cautious of us all frequently gives credit to stories which he himself is afterwards both ashamed and astonished that he could possibly think of believing.Journalists and “liberals” promote the idea of their own intellect, but they do so by demagoguery - saying simple (i.e., “linear”) things and ridiculing all whose attempts to be “wise and cautious” leads them to reject the naive, and ridiculously unrealistic, assumption that “if one is good, two is twice as good."The man whom we believe is necessarily, in the things concerning which we believe him, our leader and director, and we look up to him with a certain degree of esteem and respect. But as from admiring other people we come to wish to be admired ourselves; so from being led and directed by other people we learn to wish to become ourselves leaders and directors. And as we cannot always be satisfied merely with being admired, unless we can at the same time persuade ourselves that we are in some degree really worthy of admiration; so we cannot always be satisfied merely with being believed, unless we are at the same time conscious that we are really worthy of belief. As the desire of praise and that of praise-worthiness, though very much a-kin, are yet distinct and separate desires; so the desire of being believed and that of being worthy of belief, though very much a-kin too, are equally distinct and separate desires.
The desire of being believed, the desire of persuading, of leading and directing other people, seems to be one of the strongest of all our natural desires. - Adam Smith, Theory of Moral Sentiments
I’m put in mind of Arlen Spector - back in his “Republican” incarnation - trying to get the CBO to admit that it was ridiculous to assume that the Laffer Curve is a straight line. His mistake was to propose linear increases in tax rate - “10%, then 20%, then 30%. . . on up to 100% and then quitting in disgust when the CBO stuck to the “linearity” assumption all the way. The correct approach would have been to have switched over to a geometric progression of increases - and continually posit doublings of the tax rate (10%, 20%, 30% . . . then switch to 50%, 100%, 200% 400% . . . ) until the CBO cries uncle or claims that a high enough tax rate would yield annual revenue in excess of the market value of the whole country.