Use some logic. Let's say I'm paying a 1% tax. Do you think that if I no longer need to pay that 1% tax, I will somehow increase my production by more than 1%? The Laffer Curve works only when the previous tax rate was so prohibitive that people weren't willing to produce much at that rate. Or perhaps they were delaying production waiting for the tax rate to go down. It doesn't work when existing tax rates allow reasonable levels of investment.
Hope is the denial of reality
I don't think you understand the Laffer Curve. If you no longer pay the 1% tax, revenues go down because it is on the left side of the slope. It is only if the tax rate is higher than the optimal tax rate that tax revenue would go up if tax rates are reduced.Originally Posted by Loki
No, he does. He said the same thing you just did. But Loki knows what you don't, that the tipping point between left and right sides falls at a much higher level of taxation, a prohibitive level of taxation, than you think it does.
Last night as I lay in bed, looking up at the stars, I thought, “Where the hell is my ceiling?"
The example used was 1%.
Yes, so? It doesn't matter if the example was 1% or 35%, it goes the same either way, because that "optimal" tax rate you refer to is much higher than you think it is, much higher than taxation is now for anyone in the US.
Last night as I lay in bed, looking up at the stars, I thought, “Where the hell is my ceiling?"
No one is suggesting that ALL reductions in tax rate = increase in tax revenue. That's where its a curve.
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