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The Laffer curve almost must be true by definition: 1. If the tax rate is 0%, you will get zero tax revenue, by definition. 2. If the tax rate is 100%, p
by gcanyon 3y ago
The Laffer curve almost must be true by definition:
1. If the tax rate is 0%, you will get zero tax revenue, by definition.
2. If the tax rate is 100%, presumably no one will generate (reportable) income, and you will again get 0% tax revenue.
3. Somewhere between there (the current tax rates, for example) you get revenue.
The above equals "the Laffer Curve".
The thing people get wrong is assuming that they know where the shape of the Laffer Curve, or just where the maximum of it is. I am not an economist, but I'm going to guess that economists disagree about the above, so people arguing in bars (or online) are guaranteed to be wrong.
All of which to say that the Laffer Curve is a thing, but it doesn't prove that 90% is too high, or 5% too low without drawing conclusions about its shape.
- freen 3y agoCorrect: I should have been more precise. The particular shape of the Laffer curve espoused by the Chicago school, so called classical economists, is incorrect. Thank you.