The Laffer Curve, Part I: Understanding the Theory

The Laffer Curve charts a relationship between tax rates and tax revenue. While the theory behind the Laffer Curve is widely accepted, the concept has become very controversial because politicians on both sides of the debate exaggerate. This video shows the middle ground between those who claim "all tax cuts pay for themselves" and those who claim tax policy has no impact on economic performance. This video, focusing on the theory of the Laffer Curve, is Part I of a three-part series. Part II reviews evidence of Laffer-Curve responses. 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
• carter
• nixon

[MrWalrus52]

That this curve exists seems mathematically indisputable to me. The actual shape of the curve, the maxima in particular, is up for debate.

[Typhoonbladefist]

This guy makes me want to buy a used car

[UltraProle21]

i've tried explaining the laffer curve to my dad, who thinks that tax cuts always generate more revenue. i've explained it perfectly, multiple times, but he refuses to learn.

[cyborganic99]

His son got a B? Not an A?

[MrPinky868]

Thanks! I have a presentation to do on the Laffer Curve and this helped me a lot as well as my general understanding. Economics to the world!

[ApocDevTeam]

art laffer, isn't that the guy who got pwned on television by peter schiff?

[wangsta25]

Libertarians think the maxima is at 5%, Conservatives think the maxima is at 25%, Liberals think the maxima is at 45%, Socialists think the maxima is at 65%, and Communists think the maxima should be no lower than 85%.

[DCUPtoejuice]

@Obamaluke I wish I thought he was ignorant, but it is clear that B.O. is really only interested in wealth equality, which makes all of this irrelevent to him.

[DCUPtoejuice]

The LAST thing you want to do is increase government revenue!

[pinkycheeks]

*herman cain voice* NAHN NAHN NAHN!

[cris750]

The real goal is to lower the Corporate tax rate! The other two are NOT important for Herman Cain...and his advisors.

[cris750]

Cain's "999" is actually 9 + 9x + 9y. The variables are at the mercy of the corporate entity or owners. Cain's plan is simply another form of a BAILOUT! for the corporate entity. TARP and other BAILOUTS have failed! Therefore, the Laffer curve and Cain's formula is outdated and flawed. Expect the "free market" to be perverted again by a few individuals. If I was a corporate owner I could simply keep the prices for my products the same and benefit from the 9% corporate tax for my company.