Replies

"If liberals really want to raise money to spend, they should cut taxes." (Dog Gone)

"Personally, I wouldn't mind paying an extra $thousand in taxes as long as it meant an extra after-tax $3thousand in my income." (expat-panama)

Which is it?

According to the guy that invented the Laffer Curve, there's a limit to how much you can cut the tax rate, and still have more total tax revenue.

Laffer didn't say that taxes shouldn't go lower than that point -- even though there would be less total tax revenue.

The argument in favor of even lower taxes is easy -- when governments have too much money, they waste some of it. When they have to tighten up, that forces them to be more efficient. Also, the economy would likely continue to grow even more -- so everyone would have even more money to spend.

Dog Gone's argument against even lower taxes seems to be based on a sort of Keynesian theory -- i.e. that more government spending stimulates the economy. Sometimes, (e.g. during a depression) that's true. Otherwise, it's not.

If the left were honest, they'd be admitting that they want higher taxes to decrease the gap between rich and poor -- even if that makes everyone worse off. This could be defended on the basis of social stability -- it's much better to have a lot of people in the "middle class" than it is to have too many very rich and very poor. Actually achieving this ideal, without destroying the economy, is the tricky part.