Feeds:
Posts
Comments

Search Results for '"Laffer Curve"'

As illustrated by this video tutorial, I’m a big advocate of the Laffer Curve. I very much want to help policy makers understand (especially at the Joint Committee on Taxation) that there’s not a linear relationship between tax rates and tax revenue. In other words, you don’t double tax revenue by doubling tax rates. Having […]

Read Full Post »

Last month, I revealed that even Paul Krugman agreed with the core principle of the Laffer Curve. Today, we have another unlikely ally. Regular readers know that I’m not a big fan of the Organization for Economic Cooperation and Development. The Paris-based international bureaucracy routinely urges higher tax burdens, both in the United States and […]

Read Full Post »

I wanted California to decriminalize marijuana because I believe in freedom. Smoking pot may not be a wise choice in many cases, but it’s not the role of government to dictate private behavior so long as people aren’t violating the rights of others. Politicians, by contrast, are interested in legalization because they see dollar signs. […]

Read Full Post »

As a general rule, the International Monetary Fund is a statist organization. Which shouldn’t be too surprising since its key “shareholders” are the world’s major governments. And when you realize who controls the purse strings, it’s no surprise to learn that the bureaucracy is a persistent advocate of higher tax burdens and bigger government. Especially […]

Read Full Post »

Supply-side economics is simply the common-sense notion that people respond to incentives, though some folks think this elementary observation is “voodoo economics” or “trickle-down economics.” If you want a wonkish definition of supply-side economics, it is the application of micro-economic principles. In other words, what does “price  theory” tell us about how people will respond […]

Read Full Post »

As far as I’m concerned, no sentient human being could look at what happened in the United States in the 1980s and not agree that high tax rates on upper-income taxpayers are foolish and self-destructive. Not only did the economy grow faster after Reagan lowered rates, but the IRS even collected more revenue (a lot […]

Read Full Post »

Seven years ago, I wrote about the “Butterfield Effect,” which is a term used to mock clueless journalists. A former reporter for the New York Times, Fox Butterfield, became a bit of a laughingstock in the 1990s for publishing a series of articles addressing the supposed quandary of how crime rates could be falling during […]

Read Full Post »

I shared yesterday an example of how a big tax increase on expensive homes led to fewer sales. Indeed, the drop was so pronounced that the government didn’t just collect less money than projected, which is a very common consequence when fiscal burdens increase, but it actually collected less money than before the tax hike […]

Read Full Post »

In my never-ending strategy to educate policy makers about the Laffer Curve, I generally rely on both microeconomic theory (i.e., people respond to incentives) and real-world examples. And my favorite real-world example is what happened in the 1980s when Reagan cut the top tax rate from 70 percent to 28 percent. Critics said Reagan’s reforms […]

Read Full Post »

I know exactly how Ronald Reagan must have felt back in 1980 when he famously said “There you go again” to Jimmy Carter during their debate. That’s because I endlessly have to deal with critics who try to undercut the Laffer Curve by claiming that it’s based on the notion that all tax cuts “pay […]

Read Full Post »

Based on what she’s been saying during the campaign, Hillary Clinton is a big fan of class warfare. She has put forth a series of “soak-the-rich” tax hikes designed to finance bigger government. Her official plan includes provisions such as an increase (“surcharge”) in the top tax rate, the imposition of the so-called Buffett Rule, […]

Read Full Post »

Over the years, I’ve run into oddball stories about what happens when politicians and bureaucrats get involved with matters relating to sex. California bureaucrats are regulating participants in porn films, as humorously described by Mark Steyn. The World Bank is paying poor young women so they don’t take up with sugar daddies. Obamacare is so […]

Read Full Post »

Based on my writings, some people may think I’m 100 percent against higher taxes. But that’s not exactly true. In some cases, I like punitive taxation. Or, to be more precise, I sometimes take pleasure when punitive tax policy backfires on bad people. Here’s an example. An interesting article in Slate, authored by Adam Chodorow […]

Read Full Post »

If you owned a restaurant and wanted to generate more income and boost your bottom line, would you double your prices thinking that this would double your revenue? Of course not. You would understand that a lot of your patrons would simply dine elsewhere. And if they didn’t have other restaurants available, many of them […]

Read Full Post »

Since I’m a big fan of the Laffer Curve, I’m always interested in real-world examples showing good results when governments reduce marginal tax rates on productive activity. Heck, I’m equally interested in real-world results when governments do the wrong thing and increase tax burdens on work, saving, investment, and entrepreneurship (and, sadly, these examples are […]

Read Full Post »

What’s the Laffer Curve? It’s the simple, common-sense observation that there’s not a linear relationship between tax rates and tax revenue. Folks in the private sector understand this principle. No restaurant owner, for instance, would double meal prices and assume that revenues would climb by 100 percent. Yet that’s basically the methodology used by the […]

Read Full Post »

On the issue of so-called progressive taxation, our left-wing friends have conflicting goals. Some of them want to maximize tax revenue in order to finance ever-bigger government. But others are much more motivated by a desire to punish success. They want high tax rates on the “rich” even if the government collects less revenue. Some […]

Read Full Post »

Since I’m a big advocate of the Laffer Curve, that means I favor dynamic scoring. This is the common-sense observation that you can’t figure out the effect of tax changes on revenue without first estimating the impact on taxable income. And I’ve shared some very persuasive data and analysis in favor of the Laffer Curve […]

Read Full Post »

Many statists are worried that Republicans may install new leadership at the Joint Committee on Taxation (JCT) and Congressional Budget Office (CBO). This is a big issue because these two score-keeping bureaucracies on Capitol Hill tilt to the left and have a lot of power over fiscal policy. The JCT produces revenue estimates for tax […]

Read Full Post »

What’s the relationship between the Rahn Curve and the Laffer Curve? For the uninitiated, the Rahn Curve is the common-sense notion that some government is helpful for prosperous markets but too much government is harmful to economic performance. Even libertarians, for instance, will acknowledge that spending on core “public goods” such as police protection and […]

Read Full Post »

I’m a big advocate of the Laffer Curve. Simply stated, it’s absurdly inaccurate to think that taxpayers and the economy are insensitive to changes in tax policy. Yet bureaucracies such as the Joint Committee on Taxation basically assume that the economy will be unaffected and that tax revenues will jump dramatically if tax rates are […]

Read Full Post »

What do cigarettes and capital gains have in common? Well, they both start with the same letter, so maybe the Cookie Monster could incorporate them into his favorite song, but I’m thinking about something else. Specifically, both cigarettes and capital gains tell us something important about tax policy, the Laffer Curve, and the limits of […]

Read Full Post »

When the new Tory-led government came to power in the United Kingdom, I was rather unimpressed. David Cameron positioned himself as a British version of George W. Bush, full of “compassionate conservative” ideas to expand the burden of government. But even worse than Bush, because Cameron also jacked up taxes when he first took office, […]

Read Full Post »

If you appreciate the common-sense notion of the Laffer Curve, you’re in for a treat. Today’s column will discuss the revelation that Francois Hollande’s class-warfare tax hikes have not raised nearly as much money as predicted. And after the recent evidence about the failure of tax hikes in Hungary, Ireland, Detroit, Italy, Portugal, the United […]

Read Full Post »

My main goal for fiscal policy is shrinking the size and scope of the federal government and lowering the burden of government spending. But I’m also motivated by a desire for better tax policy, which means lower tax rates, less double taxation, and fewer corrupting loopholes and other distortions. One of the big obstacles to […]

Read Full Post »

The title of this piece has an asterisk because, unfortunately, we’re not talking about progress on the Laffer Curve in the United States. Instead, we’re discussing today how lawmakers in other nations are beginning to recognize that it’s absurdly inaccurate to predict the revenue impact of changes in tax rates without also trying to measure […]

Read Full Post »

Two of my favorite things in life are the Laffer Curve and the Georgia Bulldogs. So you know I’m going to approve when an economics professor from the University of Georgia writes a column about the power of the Laffer Curve. And since I’m a libertarian and the specific issue is about curtailing the foolish […]

Read Full Post »

I feel like I’m on the witness stand and I’m being badgered by a hostile lawyers. Readers keep asking me to identify the revenue-maximizing point on the Laffer Curve. But I don’t like that question. In the past, I’ve explained that the growth-maximizing point on the Laffer Curve is where enough revenue is raised to […]

Read Full Post »

Back in 2010, I wrote a post entitled “What’s the Ideal Point on the Laffer Curve?” Except I didn’t answer my own question. I simply pointed out that revenue maximization was not the ideal outcome. I explained that policy makers instead should seek to maximize prosperity, and that this implied a much lower tax rate. […]

Read Full Post »

If I live to be 100 years old, I suspect I’ll still be futilely trying to educate politicians that there’s not a simplistic linear relationship between tax rates and tax revenue. You can’t double tax rates, for instance, and expect to double tax revenue. Simply stated, there’s another variable – called taxable income – that […]

Read Full Post »

Next »