Remember the Laffer Curve?

Political Capital ^ | 11/25/02008 | Matthew Gagnon

[mad_as_he$$]

If you laid all the economists in the world end to end they would not reach a conclusion.

[KarlInOhio]

Libertarian = A Republican that smokes pot.

That greatly oversimplifies the Libertarian platform. You left out legalizing prostitution and gambling. :-).

I am way over on the libertarian side of the Republican party, but can still laugh at the stereotypes.

[massgopguy]

We each have our own “Atlas Shrugged Point” on the Laffer Curve.

[Shermy]

You are right

I confused Laffer’s original,

with some predictive increased GDP graphs based on taxe rates

sorry.

[Shermy]

I made a mistake. Wrong graph. Sorry. And thanks for the info.

[calex59]

Horse sh**. I consider myself conservative but have very libertarian leanings, which do not include wanting to smoke pot. I know several libertarians and they don't smoke pot. I think most people(conservatives)who think libertarians smoke pot believe it to be so because most libertarians believe in legalizing pot and other drugs. This is no different than people who realize that prohibition was bad for the country and none of the governments business and caused an unprecedented amount of crime to occur. Drugs do the same thing, and that is the libertarians stance. legalize drugs and you take the money out of it, take the money out of it, you lose the gangs, at least you lose the gangs financing.

Wanting to legalize drugs doesn't mean a person actually does drugs.

[fightinJAG]

Now, what tax cuts actually do, is grow GDP and expand economic growth. There is no reason to take that quantifiable, proven and true economic concept, and then pollute it by saying tax revenues would rise higher because of that expansion of GDP and growth. Again - yes, we’ll get more revenue, but we won’t be getting more as a percentage of GDP.

I just saw Laffer on Bloomberg and he hit every question out of the park.

This article makes a very important point. Sometimes the GOP is too smart for its own good, the net effect of which means it's stupid.

You don't need anything to sell tax cuts except to tell people they will get to keep more of their own money and the government will still have enough to work.

[fightinJAG]

At this point in time, tax cuts could actually be viewed as a “bailout” to taxpayers. (Note: I said to those who actually pay taxes.)

No amount of credit being available is going to induce someone who lacks confidence in our economic future to buy a new car right now.

No $2,000 stimulus check from the gubmint is going to dislodge the shock people feel at having lost 30, 40 or 50% of the value of their retirement savings in a month or so.

But bold tax cuts that extend from now into the future could start to restore confidence.

Why not “bail out” WISE homeowners—those who make the decisions and contributions that keep this country afloat-—by tripling the mortgage interest deduction for those living in their home and current on their mortgage for the tax year?

Or how about using tax credits to “bail out” the country’s good customers. Those who saved well for retirement and lost big in this meltdown-—instead of “buying” their 401(ks), let them treat the loss as a tax loss or even better devise a tax credit to address them. Say the TP can take up to $20K qualified (TBD) 401(k) loss (determined as loss from balance on Date 1 to Date 2, or a percentage loss for 2008, for example) as a credit with carryover per year for 20 years.

Give a tax deduction or credit for consumer loan interest, including credit cards, when the TP was current on the loan for the tax year. That would reward the consumer who pays his bills and encourage spending by those most likely to continue to pay their bills.

Fund “frequent buyer” rebates for qualified retailers. Say Wal-Mart starts a program where if a consumer spends “x” dollars at Wal-Mart during the year, Wal-Mart rebates the consumer “y” amount at year-end (before Christmas), which is reimbursed to Wal-Mart from the gubmint with “economic stimulus” funds. Could be administered in several different ways, but bottom line it’s getting the stimulus money to people spending money to get the economy going. Many retailers might be interested in such a program.

There are a million ways to take $700B in “stimulus” and creatively target it to those who are proven best at spending it through tax credits and deductions.

[fightinJAG]

If the logic were true, taxes should be cut to 1% and we will all get rich!

Nope. The whole point of this article is that that logic is not true and neither Laffer nor Reagan believed that it was. However, sloppy, lazy or dumb pols advocating tax cuts have completely messed up the arguments. They were so afraid to even imply that there could ever be cuts in government revenue, they got it wrong.

[fightinJAG]

Don’t worry. It happens.

I was threeping recently (freeping, watching Bloomberg, and listening to Rush) and, man, it was not pretty.

[Dan(9698)]

I beg your pardon.

Most Libertarians want to smoke pot.

Others want everyone else to smoke pot.

I get it.

[Rashputin]

Seems like you could take the current Federal rate, adjust it by the additional taxes states add, and compare that total to see which states were prospering and which were suffering. So, federal rate, plus average state rates, plus or minus difference between average state rate, (or something like that), then you know a lot more about where t is.

One of you folks who actually likes futzing around with numbers could probably come up wit a real formula that might be useful for modeling t.