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Increasing tax rates will lower government revenues though as history has shown. It's a maximization problem under a curve not some simple linear equation to d

Increasing tax rates will lower government revenues though as history has shown. It's a maximization problem under a curve not some simple linear equation to determine where tax rates should be set. We are arguably close to already having a rate that yields the most collection.

FrustratedMonky 3y ago
This isn't true. To say Tax Rates go up lowers revenue, I'm assuming you think if Tax Rates go down, then revenue would go up? But during last tax cuts, Rates went down, and Revenue also went down, there was NOT some increase in revenue because people somehow used their extra money more efficiently and thus generating more growth to tax on. Anybody that thinks lowering taxes spurs growth and thus revenue, then what happens if taxes go to 0, shouldn't government revenue go to infinity. This whole, lowering taxes spurs the rick to create more growth is a false narrative.
tootie 3y ago
That is stupendously untrue. The Laffer Curve is a meaningless tautology crafted by a political hack. No, we cannot set tax rates at 100%. But we can set them way higher than they are now and not cannibalize revenue. Just putting top margins in the 45-50% range would raise a ton of money and not discourage anyone from earning. Ending step up basis would not discourage billionaires from dying.
dragonwriter 3y ago
> Increasing tax rates will lower government revenues though as history has shown. History has not shown that. An entirely unempirical claim and a napkin diagram are not the same thing as “history”. > It’s a maximization problem under a curve not some simple linear equation to determine where tax rates should be set. We are arguably close to already having a rate that yields the most collection. “Arguably” is a claim that a reasonable argument with some basis beyond pure speculation can be made for the conclusion offered, but…I’m not seeing the argument for the claim that there are no tax rates in the current system of taxes which could be increased that would lead to a substantial net increase in tax collections. Care to present the argument?

FrustratedMonky 3y ago

This isn't true. To say Tax Rates go up lowers revenue, I'm assuming you think if Tax Rates go down, then revenue would go up? But during last tax cuts, Rates went down, and Revenue also went down, there was NOT some increase in revenue because people somehow used their extra money more efficiently and thus generating more growth to tax on. Anybody that thinks lowering taxes spurs growth and thus revenue, then what happens if taxes go to 0, shouldn't government revenue go to infinity. This whole, lowering taxes spurs the rick to create more growth is a false narrative.

tootie 3y ago

That is stupendously untrue. The Laffer Curve is a meaningless tautology crafted by a political hack. No, we cannot set tax rates at 100%. But we can set them way higher than they are now and not cannibalize revenue. Just putting top margins in the 45-50% range would raise a ton of money and not discourage anyone from earning. Ending step up basis would not discourage billionaires from dying.

dragonwriter 3y ago

> Increasing tax rates will lower government revenues though as history has shown. History has not shown that. An entirely unempirical claim and a napkin diagram are not the same thing as “history”. > It’s a maximization problem under a curve not some simple linear equation to determine where tax rates should be set. We are arguably close to already having a rate that yields the most collection. “Arguably” is a claim that a reasonable argument with some basis beyond pure speculation can be made for the conclusion offered, but…I’m not seeing the argument for the claim that there are no tax rates in the current system of taxes which could be increased that would lead to a substantial net increase in tax collections. Care to present the argument?