We will be better off as a party when we stop adhering to the fiction of the Laffer Curve. Balancing the budget means cutting entitlements, not cutting taxes.
both need to be done..
“We will be better off as a party when we stop adhering to the fiction of the Laffer Curve”
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The Laffer Curve is hardly fiction. It is successfully employed everyday by countless businesses. For example, if you own a business what would happen if you increased the price you’re charging for your product or service?
If you start raising your price, you will make more profit per unit, but you may sell fewer units. If you continue to increase your price, at some point the loss of sales volume will more than offset the increase unit profit, such that your revenue and total profits will go down, not up. The Laffer Curve states that there will be an optimum price for your product/service that will maximize your revenue (and/or profit).
The same is true with taxes. If you continue to raise taxes there will be a point at which tax revenues will drop off, not increase.
You can certainly question where we are on the Laffer Curve relative to taxes. Are we at the point where increasing taxes will generate more revenue or less? However, there’s little doubt among economists that you cannot continue to raise taxes and expect an ever increasing revenue stream. The converse is also true. We may be at the point where lowering taxes will generate more tax revenue (as happened with the latest Bush tax cuts), but that does not mean that if you keep on lowering taxes that you will continue to generate more tax revenues. The Laffer Curve is real, not fiction.
and you want to increase revenues, do you increase the price you charge for your product or do you lower it? If you raise your price and generate more revenue, do you raise it again? The Laffer Curve states that there