The Laffer Curve Is No Joke
I have seen a number of pieces from the American left mocking the very idea of the Laffer Curve, as though it is idiotic to think that lowering taxes could ever raise tax revenue. But pretty much every trained economist would admit that there is such a curve; the only question is where its maximum lies.
Consider:
"One great success was the Commutation Act of 1784 which reduced tea duties from 119% to 12.5%, successfully killing smuggling and enhancing the public revenue, a never to be forgotten lesson." -- Julian Hoppit, "Political how are an British economic life, 1650-1870," from The Cambridge Economic History of Modern Britain, Volume I, p. 360, emphasis mine.
Consider:
"One great success was the Commutation Act of 1784 which reduced tea duties from 119% to 12.5%, successfully killing smuggling and enhancing the public revenue, a never to be forgotten lesson." -- Julian Hoppit, "Political how are an British economic life, 1650-1870," from The Cambridge Economic History of Modern Britain, Volume I, p. 360, emphasis mine.
It is a joke though to think we are anywhere near that peak.
ReplyDeleteYes, Lord (oy, it sounds like I am starting a prayer!), that is the real debate. I am just noting that some on the left -- not any economists, I hope! -- seem to deny there is a peak.
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