[Paloma_55]

Practically speaking, the tax rate should vary and not be a fixed value, but here is how it should work.

When the economy is good, the tax rate should slowly increase until the economy starts to slow down at which point it should start to slowly drop.

Higher taxes during a good economy will increase revenue, but increasing them without concern for the impact on the economy (as Clinton did) will result in a huge gap when the economy starts to fail and taxes continue to rise.

Much like Greenspan uses interest rate to drive the economy and inflation, tax rate could be used. It just has to be understood that lowering taxes stimulates the economy and raising taxes can slow the economy from overheating.

[CPOSharky]

Unfortunately, the optimum point on the Laffer curve can only be found by trial and error.

[Extremely Extreme Extremist]

The tax rate should be fixed. It should be set at a flat 20% rate.

[Dutch Boy]

If the feds collect enough money to fund pork barrel projects then they have collected too much. THe less money they have the better. I would love to be able to direct my tax money to the budget items I care about; 50% military and national security and 50% to lock down the borders.

[July 4th]

Practically speaking, the tax rate should vary and not be a fixed value, but here is how it should work.

But the problem with that is that it isn't "free" to change the tax rates. Compliance costs change, and the benefits that come from the business community's reliance on a fixed rate diminish. The people who make economic decisions based on tax are less likely to act when there's another variable in the equation.

[wouldntbprudent]

The problem comes in with getting ANYONE to cut taxes.

[muir_redwoods]

"When the economy is good, the tax rate should slowly increase until the economy starts to slow down at which point it should start to slowly drop."

This is only true if your objective is to maximize returns to the government, a hideous idea in any context. The government should be put on a strict money diet and deprived of all but truly essential funds. Giving money to the government is like giving whiskey and car keys to a 15 year-old

[Ghost of Philip Marlowe]

It would be impossible to adjust tax rates and the revenue taken from them based upon fluctuations in the health of the economy in a timely manner. It would wind up with an endless wave of strength and weakness from one industry to the next and would be very unstable.

Also, do we really want the government that involved in determining what is a healthy economy and at what point they want to turn it around? That would put elected officials in the position of controlling a dial that they will ultimately use at re-election time.

[docbnj]

"Practically speaking, the tax rate should vary and not be a fixed value, but here is how it should work."

Perhaps you meant to say, "impractically speaking.." Politics would never act so precisely, so this idea is utterly IMPRACTICAL.

Furthermore, it is wrong. The function of tax rates is not to regulate the economy. It is to provide resources for legitimate government functions: defense and justice.

One of our problems is that tax money is used for all sorts of transfer payments, breaking the nexus between provider and spender, and thereby irrationalizing the deployment of resources. Government expenditures often make certain problems worse, as in the field of education, where government control has diluted what is taught, and has acted to drive up college expenses. It has encouraged a whole industry engaged in keeping young people out of the word of adult responsibility. Much of our "spoiled child" culture is driven by this system.

Anyway, the Laffer curve does work. It is a mixed blessing, though, if it gives the government more money.

[gridlock]

Tax rates should decline in a good economy, because the amount of money collected should be minimized at all times. In a good economy, the demands on government should be less, so revenue collected should correspondingly decline.

There is no reason the government should be interested in maximizing revenue. The government should collect the minimum amount necessary to carry out necessary government functions in a way that does as little damage to the economy as possible.

Thus endeth the lesson.

[Smokin' Joe]

Practically speaking, the tax rate should vary and not be a fixed value, but here is how it should work.

Actually, I am a fan of downsizing Government and spending less. Period.

[Natural Law]

Why do you assume that the government should be able to take as much from the economy as it can without doing damage? Why shouldn't the government be limited to only taking as much as is needed to perform necessary functions?

[kenavi]

Practically speaking, the tax rate should vary and not be a fixed value, but here is how it should work.

The aim of the Laffer Curve was not to maximize gov't revenue from taxes, but for the Federal government to work from the recognition that people change their economic behavior in response to taxes, and that the biggest danger of taxes is that it depresses economic activity.

In that spirit, gov't should not be trying to fine tune the economy by constantly jiggering the tax rate, but rather to set as low a tax rate as possible just as long it collects enough money to carry out its essential functions, and set as simple a structure as possible so as not to try to favor one economic activity over another. Let the people decide.

Ultimately, IMO, the gov't could borrow all the money it needs to operate, and tax just enough to service its debt.

[SauronOfMordor]

Practically speaking, the tax rate should vary and not be a fixed value,

Practically speaking, FedGov should restrict spending to just those things that the Constitution actually authorizes, and let the taxpayers keep their damn money

I disagree with the underlying concept that taxes should be at a level which maximizes government revenue