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A question: how does the fact that these are revenues instead of rates play into this discussion? I.E., one of the arguments of free-market proponents is that l
by icarus_drowning 15y ago
A question: how does the fact that these are revenues instead of rates play into this discussion? I.E., one of the arguments of free-market proponents is that lower tax rates can increase revenues by allowing the economy to grow-- which, if it were true for some or all of the economies, would actually undermine the point.
I'm genuinely curious about this, not trying to stir up a giant political debate.
- yequalsx 15y agoI think it's quite bad to focus on rates. Given that there are usually loop holes and tax incentives it becomes necessary to look at tax burden as a percent of GDP. The people who make the argument you mentioned are wrong. If lower taxes always lead to greater economic growth then the optimal tax burden would be 0%. But this would mean there is no government and we'd be in an anarchy. Does anyone really think an anarchy is the optimal way to grow an economy?