Understanding Supply Side Economics

This is the nonpartison version of "Tax Cut" and is suitable for inclusion on nonpartison tax exempt web site.

Category:

Education

Tags:

• Laffer
• Curve
• tax
• policy
• supply
• side

[lurchutube]

Unfortunately they had to lie at the end in order to try to make supply-side look legitimate. In fact, govt revenues went down so much after Reagan's 1982 tax cuts that even after explosive spending growth, he still had to raise taxes at highest levels in history to make up for lost govt revenue. Bush just spent like a drunk sailor and still created double the debt of Reagan. SS economics requires you pretend deficits and unemployment don't count under SS'ers.

[TheRockeieio]

@lurchutube

You are entitled to your own opinion but not your own facts.

There is nothing inaccurate or misleading in the video.

Government revenues did indeed increase after the Reagan tax cuts, deficits went up as well because the Democrat controlled congress would not control spending.

Bush spend way too much.

How's Obama doing at controlling spending?

Democrats are willing to shut the government down to keep spending up.

[eatitl8r]

The Laffer curve was used as a very simplistic way of justifying tax cuts with regard to "supply-side" (voodoo) economics. One must realize that economics requires a bit more thought than merely deciding which side of a line we're on. Economics is, after all, a social science that deals with the production, distribution and consumption of goods and services. It involves markets, moods and behaviors. Beware when someone tries to explain something so complex in such a simple way.

[TheRockeieio]

@eatitl8r

One has to explain supply side economics in simple terms so that even liberals can understand it. If you need proof, just read through all the comments here. That should be convincing.

Apparently many would continue to work even after tax rates go to 100%.

It's an IQ test and many fail it miserably.

[Piglatinsuperstar]

@forsubmoves

it looks like the best spot on the laffer curve is about 42-43% tax rate. the commentator isnt honest enough to mention it tho. this is propaganda that the govt is after everyone's money

[cnimsz]

@Rockeieio

This theory is based on an the unprovable assumption of a direct correlation between tax rate and motivation to earn income. While the extremes of the curve are true (the 0 and 100) the rest of the curve is unprovable without ignoring all other economic variables of a prospective time period. This eliminates any reasonable comparison to be made and is also the reason why this theory is difficult to base a functional economic plan on. You yourself use this argument for the 1950s.

[fletchermcgee1]

"non-partisan"

[LucyLabrador1]

That was a great simple explanation!

[1Pr0digy]

yeeeah lets make up some statistics!

[gulbirk]

This is nonsensical. The "socialist" government of Norway actually introduced a tax system that means you can literally tax a company 100% (of course no one does that) without that affecting the company at all. Profit tax.

Since the profit is tax,all that is taxed is what would otherwise go to stockholders.

[wtong89]

It is true that Supply-side economics creates jobs, but the only flaw about that job creation is that those jobs are in other countries like India and China.

[spark300c]

Idea of this is fairly good. The curve could be shifted by elasticity. There got be a fair way to tax the rich and peak revenue is the way to do it. Ever since Reagan America has face competition by third world counties would just want a job and care less about the rich. All they want is job and they are will to work lot less and lot harder. Americans getting poor because we let our post ww2 success go to our heads.

[gkwedlund]

I totally agree, right up to the last mistake. We know for a fact that the maximum efficiency of that curve remains to the right of where it currently is. Study after study shows it. As well, laffer's curve has been proven flawed. Only 18% of the top 1% work at all, end European economies are better than ours right now. It has been suggested by numerous studies that the level of taxes under Clinton was as close to perfect as possible.

[jmitterii2]

@bryce2197 I tried it off the 2010 budget. And that 30% income tax, 25% social and corp tax is in addition to the current taxes, which I agree, law of diminishing returns would probably take effect here in a big way. We're really screwed, we have roads and bridges that need repair, an education system that needs reform, not necessarily more money to education, but higher knowledge progression, no reason 10th graders shouldn't all know calc. etc. We in for some interesting times ahead.