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To: Kaslin
I’m a big advocate of the Laffer Curve.

The Laffer curve is simply a restatement of the mean value of derivatives on a smooth differentiable curve. If the derivative is positive at one end, and negative at the other end, there HAS to be at least one place somewhere at an intermediate value of the independent variable where the derivative is zero, which identifies a local extrema on the interval. Being an advocate of a mathematical theorem is a no-brainer.
4 posted on 09/21/2014 11:52:52 AM PDT by SpaceBar
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To: SpaceBar

The writer wants to use the curve as a policy tool, not just worship the obvious relationship shown by the curve.

The writer did miss the most powerful example of using lower tax rates to raise revenue and business velocity significantly. When the capital gains tax is lowered, many investors use the opportunity to sell when they would otherwise hold (or in the case of real estate, use tax-deferred exchanges). The resultant sales raise revenue from each investor from zero (if prop not sold) to whatever rate has been set. This also causes consumption and job growth as new owners tend to spend to improve properties. Also, properties
being readied for sale often get improvements at that time.

Also, sales generate idle cash which is used for new investments, or deposited in banks where it is loaned to others so they can do or grow businesses.

The old ripple effect.


6 posted on 09/21/2014 1:09:56 PM PDT by SaxxonWoods (....Let It Burn...)
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