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>* The Laffer Curve is self evident I don't think the claim that there is atleast one highest total tax collected point in between 0 and 100% tax is that wild?
by rightbyte 2y ago
>* The Laffer Curve is self evident
I don't think the claim that there is atleast one highest total tax collected point in between 0 and 100% tax is that wild? It aint that much more to it? (I agree with the rest of the point about missusing it)
You could argue that the model is too simple ofcourse. Or that 100% tax on certain things don't give 0 revenue and that 100% tax is not the roof. E.g. some people are paying to work at farms.
- n4r9 2y agoThe response of tax revenue to tax rate changes might be discontinuous and highly dependent on the current tax rate and other temporal factors. Like, the optimal strategy for the next 5 years might be to increase tax for one year and then decrease it, whilst the optimal strategy for 10 years time is to do nothing at all. Imo this renders the idea of the Laffer curve to be pretty useless.