The Laffer Curve

[bjl584]

A subject of controversy, the Laffer Curve places tax revenues and tax rates on the famous Bell Curve. The basic assumption is that a tax rate of 0%, the government takes in no revenue. Also, at a tax rate of 100%, the government also takes in no revenue as there is no incentive to produce anything. Therefore, somewhere in the middle of these two extremes, there must exist (mathematically anyway) a tax rate that both maximizes revenues to the government, and at the same time, maximizes economic growth and productivity.

Laffer curve - Wikipedia, the free encyclopedia

[tripods68]

Math doesn't work when taxes, deficits, entitlements, war and poverty, high unemployments, recessions, revenues and incentives are vetted in the equations in-today's highly charged political climate. That's just reality.

[bjl584]

Originally Posted by tripods68

Math doesn't work when taxes, deficits, entitlements, war and poverty, high unemployments, recessions, revenues and incentives are vetted in the equations in-today's highly charged political climate. That's just reality.

True. The equation is pure mathematics and leaves out real world conditions. Still, it's an interesting thing to think about, and the logic behind it seems to make sense. At what point does increased taxes stop resulting in increased revenue?

[Brent87st]

pure mathematics and leaves out real world conditions. Still, it's an interesting thing to think about, and the logic behind it seems to make sense. At what point does increased taxes stop resulting in increased revenue?