He is joined by the likes of former Reagan economic advisor Arthur Laffer (of «
Laffer Curve» fame).
After teaching at Hillsdale College for three years, he moved to the financial sector to work as an analyst for Arthur Laffer (of
Laffer Curve fame).
# 67 & 71 Ofcourse in
the Laffer curve, tax increases positively increased revenues, until passing the optimum point, then reducing taxes increases revenues.
«[T] he whole California gang had taken [
the Laffer curve] literally (and primitively).
Presidents Kennedy and Reagan understood
the Laffer curve well.
Theory and empirics are therefore in accord, for the UK the 45 % tax rate is about the peak of
the Laffer Curve.
Below is a graph, based on
the Laffer Curve, showing the relationship between the proportion of the market that follows index - type strategies and something I am calling «investor utility.»
The Laffer Curve shows the relationship between marginal tax rates and aggregate government revenue.
You can read more about
the Laffer Curve if you are interested but that is not the focus of this post.
If we recklessly extend
the Laffer Curve example then it lies somewhere farther over to the right, i.e. a higher percentage indexed.
There is something similar to
the Laffer Curve that applies to governments, though the shape is unknown to me.
I'm no great fan of the idea of
the Laffer Curve, never have been, but this was the first time I gained some sympathy for the idea.
Halfon stated that «evidence suggests that we are on the wrong side of
the Laffer curve and that lower taxes might increase revenues».
This is a good answer, but I would add: The phrase «trickle - down economics», even as a simplistic political slogan to refer to a complex set of macroeconomic policies, really only refers to one element of supply - side economics (namely,
the Laffer Curve).
I.e., I believe
the Laffer Curve is valid (it obviously is, in the sense that 100 % and 0 % taxation will both yield nothing), but the question is where the peak of the curve is - and whether the status quo level is to the right or the left of the peak.
It was New Labour that cut CGT rates to 18 % (based, I imagine, on some kind of
Laffer curve notion).
Arthur Laffer, member of Reagan's Economic Policy Advisory Board from 1981 - 89 and powerful advocate of supply - side economics, constructed the «
Laffer Curve» to support the trickle - down approach of the Reagan (and Bush) tax cuts.
The Bush administration had claimed, using
the Laffer Curve, that the tax cuts actually paid for themselves by generating enough extra revenue from additional economic growth to offset the lower taxation rates.
A further problem is that increasing taxes on high achievers yet more will put them way beyond
the Laffer Curve prompting Ireland to enter the market for a start The next problem is that you assume a «Pupil Premium» is a popular idea.
Emo
The Laffer Curve «Reality» TV Droopy drawers (hip hop variety) Hack - spewed talking points on cable «news» Endlessly looping viagra / light beer / car insurance commercials Throat - singing (metal variety) McMansions Newt Gingrich A political discourse based on fear.
It's been discredited no matter how much Laffer twists his argument (see: http://economistsview.typepad.com/economistsview/2008/01/the-new-laffer.html) Even if you argue it's still a misrepresentation of
the Laffer Curve to automatically equate it with the New Right, Laffer himself can reasonably take some of the credit for that, having been closely aligned with the discredited economics of both the Nixon and Reagan adminstrations (see: http://www.newstatesman.com/books/2007/11/supply-side-economic-tax-rich) But the point is this: if Cameron decides to implement tax cuts on the basis of
the Laffer Curve — in the belief that this will top up the government coffers - we're in trouble.
Nobel laureate James Tobin about summed it up when he wrote that: «the «
Laffer Curve» idea that tax cuts would actually increase revenues turned out to deserve the ridicule with which sober economists had greeted it in 1981.»
I take your point about separating
the Laffer Curve as a theoretical construct from how its actually been applied in practical policy.
Put simply,
the Laffer curve illustrates what happens when the government raises taxes too much — theoretically, it ends up bringing in less revenue than before the tax hike.
The Laffer curve says that tax revenue at both 0 percent and 100 percent is the same: zero.
Going back to an 18 % federal rate would mean a 28.7 % combined rate, pretty close to the peak of Mintzâ $ ™ s
Laffer curve.
In successfully seeking the 1980 Republican nomination for President, Ronald Reagan embraced
the Laffer Curve theory that tax cuts would increase tax revenues.
Applying
the Laffer curve, there is no way Liu or anyone can reap the kind of revenue from excessive pot taxation that political plans call for.
Principally,
the Laffer Curve is a representation of the relationship between rates of taxation and levels of government revenue.
At this point it's relevant to take a look at the concept of
the Laffer Curve.
Not exact matches
There's no mention of
Laffer in the yield
curve article, and no mention of yield
curves in the
Laffer article!
One of the first pieces I read on the slope of the yield
curve, which continues to influence my thinking to this day, was written in the 1980s by economists Arthur
Laffer and Victor Canto.
That's the same
Laffer who wrote the piece on the yield
curve I mentioned above back in 1986.