The Laffer Curve, Part I: Understanding the Theory

YouTube ^ | January 28, 2008 | Dan Mitchell

[Moral Hazard]

” Liberals use this argument in the reverse - tax someone more and they’ll work harder to get their income back to where it was.

It’s an evil theory. Seriously evil. It’s like whipping slaves in the field to get more work out of them. It comes from an authoritarian mentality inherent to liberals.”

Both the income effects and substitution effects have an..umm....effect. What liberals always miss and conservatives often miss even though it strengthens their case is that both effects lead to a loss of economic efficiency.

After all, if you have to spend extra hours working to support your family under higher taxes, when you could work less and spend more time with your family under lower taxes isn’t that an efficiency loss too? And shouldn’t liberals oppose it (even though they obviously don’t) just as much as conservatives?

[MrB]

you could work less and spend more time with your family under lower taxes isn’t that an efficiency loss too? And shouldn’t liberals oppose it (even though they obviously don’t) just as much as conservatives?

"Liberals" don't support you spending more time with your family. If you spend more time with your family, you'll be instilling YOUR values in them instead of THEIR values.