Partly because of the connection of the Laffer curve
with considerations about distribution versus efficiency, economists have attempted to calculate the top of the Laffer curve
We did not compute the MCF for corporate income tax for Nova Scotia, Ontario, Prince Edward Island, or Saskatchewan because these four provinces are on the downward-sloping section of the Laffer curve
with respect to their corporate income tax rates.
The truth is that the Laffer Curve
held that high marginal tax rates discourage work effort, savings and investment, while promoting tax avoidance and evasion.
So, in these two cases, Laffer curve
, (3) drug legalization, we have exceptions to the general rule that utilitarianism, broadly construed, and libertarianism, always work in the same direction.
Finance Minister Pranab Mukherjee's endorsement of the Laffer Curve
principle is even more gladdening since he also held the portfolio in the 1980s in the Indira Gandhi Cabinet, presiding over perhaps the most regressive tax regime.
Now it appears that some Democrats, including President Obama, have grasped the idea behind the Laffer curve
and the potential for more revenue by lowering tax rates.
His economic agenda consisted of little more than touting the Laffer Curve
and other supply-side economic trivia.
The Laffer curve
(Laffer, 2004) illustrates the basic idea that changes applied to tax rates have two effects on taxes: the arithmetic effect and the economic effect.
Hong Kong is an almost perfect example of the Laffer Curve
in action--low tax rates generate high rates of real economic growth, leading to increased revenues which can be used for social welfare while maintaining low tax rates.
The Laffer Curve
, one of the icons of supply-side economics, was born (American Spectator, Jan/Feb 2002).
The examples they had quoted were from the tax cuts of Reagan's era which led to fiscal deficits instead of increased tax revenues as the US economy at that time was on the left-hand-side of the Laffer curve
instead of on its right that the Reagan's policy makers had assumed erroneously.
Irving Kristol's protege Jude Wanniski, the godfather of supply-side economics, used an AEI fellowship to write his 1978 book The Way the World Works, which promoted the dubious Laffer Curve
, and its purported proof that tax cuts lead to more net government revenue.