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Not a direct answer to your question, but I think tax rates in Britain in the 1960s and 1970s were very high, then when the rates were lowered, tax revenue actu
by hollerith 11mo ago
Not a direct answer to your question, but I think tax rates in Britain in the 1960s and 1970s were very high, then when the rates were lowered, tax revenue actually went up. The term "Laffer curve" was used a lot in public discussion of this topic in the 1970s and 1980s.
- bediger4000 11mo agoTax revenue hasn't gone up in the US despite many rounds of lowering taxes since the 1980s. Clearly, the US is on the part of the Laffer curve with a positive slope. Laffer curve revenue increases have to derive from an increase in the marginal benefit of working. I can't see a mechanism for rich people to increase tax revenue if the rates drop.
- hollerith 11mo agoThe mechanism is that when the rate drops, people spend less time dodging taxes and more time earning taxable income.
- bediger4000 11mo agoExactly. That doesn't apply to wealthy people, whose income is almost entirely from investments.
- hollerith 11mo agoI disagree. What would resolve our disagreement is data on tax revenue before and after the lowering of the rates in the 1970s (or whenever it happened) broken down by the type of personal income (salary versus investment income).
- bediger4000 11mo agoThank you for the civil disagreement. While I remain unconvinced that rich people, whose income is almost entirely investment returns and other kinds of working the financial system, would decide to "cheat less" on taxes if the tax rate goes done, I appreciate that you propose a fact-based method of deciding how to resolve the disagreement. Bravo!