"An Engineer's Look at the Laffer Curve"

RNG

Forum Staff
Apr 2013
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That's just flat out false. Obviously a 0% tax rate will result in no revenue, and if 100% results in maximum revenue then that would be said point. If it's not 100%, then it has to be somewhere between 0% and 100%. Sorry, but the very logical foundation for your statement simply isn't there. You can debate where that maximum revenue point is, but not a claim that there is no point of maximum revenue. Even if we don't know what the shape of the curve is, that wouldn't prove that a point of maximum revenue does not exist.


That might be someone's argument, but it's not the most important one. How economically wasteful a tax rate is would be a more important and useful argument.


I don't buy this. What's your source to support this?

Even if it were true, that's not a valid reason for increasing taxes. We can cut down the size of government to deal with this problem.


If you say so, but this thread isn't about some political party's tax plan.
The part of your post I bolded just added another variable that adds to the fact that attempting to use this theoretical concept is useless for quantitative work.

BTW, 100% rate leads to zero revenue again.
 
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The part of your post I bolded just added another variable that adds to the fact that attempting to use this theoretical concept is useless for quantitative work.
:lol:

Ok, well far be it for me to protest too much, because personally I'd like to be able to pay less in taxes and all this does is add support for that position. It makes it more difficult for government to have a good reason to levy a higher tax rate or even a tax rate of any significant level. That means make the tax rate very small, such as 0.01% as a starting point & if the government wants to increase it by even 0.001% they have a much steeper hill to climb, much more difficult to defend their position without the math or economical argument for doing so.
 

RNG

Forum Staff
Apr 2013
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La La Land North
:lol:

Ok, well far be it for me to protest too much, because personally I'd like to be able to pay less in taxes and all this does is add support for that position. It makes it more difficult for government to have a good reason to levy a higher tax rate or even a tax rate of any significant level. That means make the tax rate very small, such as 0.01% as a starting point & if the government wants to increase it by even 0.001% they have a much steeper hill to climb, much more difficult to defend their position without the math or economical argument for doing so.
How does this add to the position of justifying less taxes when in fact there is no way of knowing whether it is an increase or a decrease that will lead to a better result for society without as I said a whole bunch of dangerous experimentation?
 
Sep 2015
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:lol:

Ok, then you might want to let Laffer know, because tax rate is what he's showing:

Ahh the Laffer curve is plotted on an X-Y axis but only shows the +Y and +X. I also want to see the -Y and -X axis. Is it too much for Laffer to show it all? Laffer is a tard.
 
Jul 2014
15,472
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massachusetts
That's just flat out false. Obviously a 0% tax rate will result in no revenue, and if 100% results in maximum revenue then that would be said point. If it's not 100%, then it has to be somewhere between 0% and 100%. Sorry, but the very logical foundation for your statement simply isn't there. You can debate where that maximum revenue point is, but not a claim that there is no point of maximum revenue. Even if we don't know what the shape of the curve is, that wouldn't prove that a point of maximum revenue does not exist.
What we know is the ideal tax rate is between 1% and 99%
That might be someone's argument, but it's not the most important one. How economically wasteful a tax rate is would be a more important and useful argument.
We are in one of the longest periods of sustained growth in history, with full employment, and still running huge deficits, this is the time to raise taxes, if you can't balance the budget now, you will never balance the budget.
I don't buy this. What's your source to support this?

Even if it were true, that's not a valid reason for increasing taxes. We can cut down the size of government to deal with this problem.
When Reagan cut taxes, the national debt was 800 billion, when he left office it was 2.4 trillion.
When Bush cut taxes, there was a 300+ Billion dollar surplus, when he left office there was a 1.7 trillion dollar deficit.
Who's going to cut the spending?
No one, especially when they don't have to balance the budget, all the goodies for a discount.
Balance the budget with taxes, and you'll see the political pressure to reduce spending.
And that's the only way you'll ever get the pressure to reduce spending, by making the wealthy close the budget gap.
Because it's the wealthy that apply the pressure.

If you say so, but this thread isn't about some political party's tax plan.
This isn't about political party's tax plan, it's about what has to be done.
 
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How does this add to the position of justifying less taxes when in fact there is no way of knowing whether it is an increase or a decrease that will lead to a better result for society without as I said a whole bunch of dangerous experimentation?
The excessive taxation and social engineering are the "dangerous experimentation" (as you put it).

What a better result for society is, and whether government should be involved in that, are matters yet to be settled (it's a different discussion for those issues).

The burden of proof for the need for any rate of taxes in on the entity (state/government) trying to claim them.

When it comes to any other situation (private business, other than dealing with the state), we have the option to choose who we do business with. If I go to one store looking for a product, and I'm not satisfied with the product's quality or price the store is charging for it, I can always to go that store's competitors to look for a better deal. That causes all stores that offer the product I'm looking for to keep its prices from being excessive, or it gives someone else who can offer a better product, or better deal (or both) to go into business in competition with those other stores & products.

The state lacks this self-regulating mechanism on prices/fees aka taxes - at least directly, we can deal with that indirectly by voting for the candidates who are going to get rid of excessive taxes & social engineering (the dangerous experimentation stuff).

Anyways, since we can't just go to a competitor for a better deal when we need something, this makes it more prudent for the government to justify its tax rate to fund the services that government ought to be in the business of providing.
 
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What we know is the ideal tax rate is between 1% and 99%
Ideal for what? Growth maximizing, revenue maximizing, or a capitalism utopia? For growth maximizing or revenue maximizing, I'll go along with your claim, but for a capitalism utopia, it would be 0%.

We are in one of the longest periods of sustained growth in history, with full employment, and still running huge deficits, this is the time to raise taxes, if you can't balance the budget now, you will never balance the budget.
If you raise the tax rate higher than the revenue maximizing point, revenue will be lower meaning less to balance the budget, higher deficit, etc. If you lower taxes to the growth maximizing point rate, and growth is higher year after year such that the combined total for all those years is more revenue than keeping taxes at the revenue maximizing point, you end up with a higher combined total.

When Reagan cut taxes, the national debt was 800 billion, when he left office it was 2.4 trillion.
When Bush cut taxes, there was a 300+ Billion dollar surplus, when he left office there was a 1.7 trillion dollar deficit.
There are many issues to address within all of this. For now I don't concede anything about this nor what it's meant to imply or suggest.

Who's going to cut the spending?
No one, especially when they don't have to balance the budget, all the goodies for a discount.
I think spending should be cut when possible, the budget should always be balanced, and taxes should always be cut whenever possible (or refunds given to tax payers for money that didn't need to be spent).

Balance the budget with taxes, and you'll see the political pressure to reduce spending.
Why would that be so?

And that's the only way you'll ever get the pressure to reduce spending, by making the wealthy close the budget gap.
Because it's the wealthy that apply the pressure.
I'm not exactly sure what you think the wealthy have to do with this in general, but I do think you're kinda right that some of the wealthiest people are applying pressure. I wouldn't call it applying pressure, though, I'd call it crony capitalism with these wealthy funding candidate campaigns, etc. You see it when these wealthy crony capitalists fund politicians who want to make government bigger & raise taxes.

This isn't about political party's tax plan, it's about what has to be done.
Yeap.
 

RNG

Forum Staff
Apr 2013
39,618
27,400
La La Land North
The excessive taxation and social engineering are the "dangerous experimentation" (as you put it).

You don't know that. I posit that too low taxes such are the current situation are doing terrible damage.

What a better result for society is, and whether government should be involved in that, are matters yet to be settled (it's a different discussion for those issues).

Show me any government where that isn't the case.

The burden of proof for the need for any rate of taxes in on the entity (state/government) trying to claim them.

That is ridiculous. For a government to exist at all it will need revenue. And anarchy isn't a viable solution either.

When it comes to any other situation (private business, other than dealing with the state), we have the option to choose who we do business with. If I go to one store looking for a product, and I'm not satisfied with the product's quality or price the store is charging for it, I can always to go that store's competitors to look for a better deal. That causes all stores that offer the product I'm looking for to keep its prices from being excessive, or it gives someone else who can offer a better product, or better deal (or both) to go into business in competition with those other stores & products.

The state lacks this self-regulating mechanism on prices/fees aka taxes - at least directly, we can deal with that indirectly by voting for the candidates who are going to get rid of excessive taxes & social engineering (the dangerous experimentation stuff).

Well, if people would just start voting for guys that are intelligent and ethical instead of those that belong to the correct tribe that situation could be cured. It has long been said that people get the government they deserve.

Anyways, since we can't just go to a competitor for a better deal when we need something, this makes it more prudent for the government to justify its tax rate to fund the services that government ought to be in the business of providing.
So you have completely abandoned your claim that Laffer said low taxes are good and are just another anti-tax voice. I reiterate that in fact you do have a choice. Vote intelligently instead of believing the party line.