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View Diary: Who Needs Big Government? (97 comments)

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  •  Has any Republican ever (1+ / 0-)
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    pointed to exactly which point on that Laffer curve they think we are when they're crying for all those additional tax cuts?  I doubt even Prof. Laffer knows.

    My Karma just ran over your Dogma

    by FoundingFatherDAR on Wed Feb 11, 2009 at 08:14:53 PM PST

    [ Parent ]

    •  It's harder if you draw the curve accurately. (0+ / 0-)
    •  No, they just go with "tax cuts raise revenue"... (1+ / 0-)
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      which is an established lie.

      Very loosely, the concept of the Laffer Curve is not entirely wrong---there is probably a tax rate beyond which revenues fall such that lowering the rate from that point will result in increased revenues.  But the maximum appears to be very far to the right (e.g., revenues peak at a very high tax rate, much higher than what we have now) and the revenues at a 100% tax rate are far greater than zero.  In the U.S.S.R., for instance, tax rates were effectively 100%, but there was substantial economic activity and the government collected plenty of revenue.  If there is a Laffer Curve in real life, it is quite different from the semi-circle you typically see; it's more likely a long upwardly sloping curve that hooks slightly downward at the upper right.

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