The Laffer Curve, Part II: Reviewing the Evidence

This video reviews real-world evidence showing that changes in marginal tax rates can have a significant impact on taxable income, thus leading to substantial amounts of revenue feedback. In a few cases, tax-rate reductions even "pay for themselves,'' though the key lesson is the more modest point that pro-growth changes in tax policy will have a positive impact on economic performance and that good tax cuts therefore do not "cost" the government much in terms of foregone tax revenue.

This video is second installment of a three-part series. Part I reviews theoretical relationship between tax rates, taxable income, and tax revenue. Part III discusses how the revenue-estimating process in Washington can be improved. For more information please visit the Center for Freedom and Prosperity's web site: www.freedomandprosperity.org.

Category:

News & Politics

Tags:

• laffer
• curve
• mitchell
• quinlan
• taxes
• tax
• competition
• oecd
• harmonization
• reagan

[popcur]

In time, inflation will go large on Obama's watch. Maybe, in the future Obama and Carter could goon a tour together. Obama will do his best to kill the american dream. President GW Bush had a hand in it , too.

[dfctomm]

Printing money is only half of the inflation equation, the velocity of money is the other half. since the current crisis began we have printed a great deal of money, but it hasn't ramped up inflation because the velocity has dropped sharply. The money isn't circulating through the system, instead it's just sitting there in the large banks, and that's why inflation hasn't ramped up.

[itcanbecheezcaketime]

@Xtragicfever

Economics, kid. Learn it.

[Xtragicfever]

@itcanbecheezcaketime LOL WTF are you talking about?

[itcanbecheezcaketime]

The Laffer Curve isn't always accurate. Just because people are taxed less doesn't mean they're willing to report more to the IRS. It reminds me of trickle-down economics, in that if we give the rich more tax breaks, they'll spend it on jobs. Truth is, more profit does not equal more jobs. The only thing that equals more jobs is more demand for products. And just like taxes don't equal more productivity for the economy, what does equal more productivity is demand and public certainty. I guess...

[p4h10oso]

So is this an argument for a flat tax, dunno.

[Illyrien]

@hiredhelp

True, but despite the oversimplifications, it hardly compared to the economic mistakes of say Marx or Keynes. There is some truth here.

[Illyrien]

@vickiedavis

Not just the rich... While I was studying at the university (in Denmark) I spent a fair deal of effort evading taxation. These efforts included evading the tv tax man (saving about 350 USD/year) and also buying soda and beer from Germany, CD/DVDs from Sweden and books from the UK.

[daobagua]

@nlefevre Please elaborate. I might be one of the ignorant and would like to rid myself of that.

Cheers.

[nlefevre]

This is comical. For each argument there is a glaring and well-known fundamental flaw. In each and every case, Mitchell fails to address it although he is surely aware of them. Could it be that Mitchell is preaching only to the priesthood and the ignorant?

[nlefevre]

This is comical. For each argument there is a glaring and well-known fundamental flaw. In each and every case, Mitchell fails to address it. Could it be that Mitchell is preaching only to the priesthood and the ignorant?