The Laffer curve was a hockey-stick graph prank.
Just like the ones the global warmers use.
If the logic were true, taxes should be cut to 1% and we will all get rich!
AS for the “optimal” tax rate, the Laffer curve in no way considers it, it just assumes deficit spending is good.
Remember “we will grow out of the deficit?” That was Laffer-curve-like witch doctor stuff.
The Laffer Curve is a Bell Curve.
Where did you get that? The Laffer curve just says that at 0% tax the government will get no revenue because 0% times the tax base is $0. Similarly a 100% tax rate will give zero revenue because no one will work as the complete slave of the government. Well, maybe some would consider fewer whippings as a tax break and work to get that. Somewhere in between there is a maximum point. If we are higher than that point, then cutting the rate will increase tax revenue. If we are at a lower tax rate than that maximum, then cutting taxes will reduce tax revenue.
No one knows for certain what that point is and how the short range value of it (should I work overtime this weekend to get more cash even if I pay half in taxes or just goof off?) compares to the long range (should I start a plumbing business or just be happy soldering pipes for my current wage?). It is even possible to have a tax rate above the long term peak point but below the short term one, so cutting taxes will cut revenue for a few years but build more business which will pay even more taxes in five or ten years.
My biggest problem with the Laffer curve is that it implied that maximizing tax revenue was some type of ideal rather than maximizing the after tax wealth of the people.
You don’t know what the Laffer Curve is, do you? Hint: It is a “curve”. Hint 2: It is not monotonic.
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.