Laffer Curve

Investopedia Inc. ^ | Arthur Laffer

[george76]

Invented by Arthur Laffer, this curve shows the relationship between tax rates and tax revenue collected by governments...

as taxes increase from low levels, tax revenue collected by the government also increases.

It also shows that tax rates increasing after a certain point would cause people not to work as hard or not at all, thereby reducing tax revenue.

Eventually, if tax rates reached 100% , then all people would choose not to work because everything they earned would go to the government.

[Mulch]

But how can the government help people if they don't take their money first?

[george76]

If you tax people who work and you pay people who don’t work, do not be surprised if you find a lot of people choosing not to work ...

[george76]

“Government is like a baby:

An alimentary canal with a big appetite at one end and no sense of responsibility at the other.”

— Ronald Reagan

[MarineBrat]

Governments would like to be at point T*, because it is the point at which the government collects maximum amount of tax revenue while people continue to work hard.

A poor governent, in my opinion.

[fhlh]

"anyone?, anyone?" "It's called the Laffer curve...."

"Bueller? Beuller?"

[Da Bilge Troll]

We should never forget, however, that to a socialist, taxes have nothing to do with revenue and everything to do with control. A 100% tax rate equals 100% control.

[CALawyer]

The more important question is not how we find that tax rate that maximizes revenue to the federal government, but instead the lowest tax rate that generates revenue to fund the constitutional mandated and necessary expenditures of the federal government.

[george76]

I totally agree.

This Laffer Curve argument is to try to back off some of the socialists who do not understand economics to back off a little.

Also there are the socialists who do understand economics but are just evil.

[M-cubed]

Great answer!..now the question is...Can u get there from here?....I'm afraid we cant get Pandora back into the box!...all we can do is try to keep her isolated

[CALawyer]

Hey, I'm just dreaming. With a dumbed down society, we'll probably never arrive at a federal government that functions within its constitutional parameters (at least not in my lifetime). This is apparently still too sophisticated a concept to digest. With talk radio and web sites like this, the topic is at least finally being seriously discussed (though it's still falling on deaf ears with this Administration).

[george76]

The Romans had the same problems 2000 years ago...

Big, bloated government unresponsive to the people, high taxes...

[george76]

The Laffer Curve in Action

Can tax receipts rise if taxes are cut?

Yes. Here’s more proof.

another vindication of the Laffer curve.

http://www.nationalreview.com/nrof_buzzcharts/buzzcharts200512150917.asp