Raising taxes does not generate more revenue. Cutting taxes increases revenue. See Laffer curve. I thought Freepers knew this already.
“Raising taxes does not generate more revenue. Cutting taxes increases revenue. See Laffer curve. I thought Freepers knew this already.”
We know all about the Laffer curve. It works when a number of factors other than simple increase or decrease of tax rates are present. It only works when rates are at or above equilibrium and tax collections have become elastic. When rates are below equilibrium, taxes collected are inelastic.
To take it to the extreme to demonstrate this, assume that the New Hampshire income tax rate is 0% (which it is right now). If you increase that rate to 1%, tax revenues will increase. At some point tax rates will reach an equilibrium where tax rates maximize revenues. Above that, total revenues go down because people will move out of state. On the other end of the spectrum, the tax rate is 100% and everyone moves out of state or stops working. So... the Laffer curve depends upon the marginal propensity of the citizens to avoid taxes in relation to the costs of avoiding them.