Spin Time

[Stevo 666]

I'll explain the principle, which isn't too difficult to understand, but strangely lefties seem to struggle with it...

Tell me which bits you disagree with:
- Pretty clear that when the tax rate is zero, no tax is collected
- Similarly, when the tax rate is 100% (I.e. the state takes everything you earn) the tax collected will also be zero because nobody would bother doing any work on business.
- At somewhere in the mid range of tax rates, clearly tax is collected as we see this in pretty much every country.
- So going from the mid range to 100%, the tax collected must decline.

If you don't believe the Laffer curve, then are you saying that tax collected will stay constant or even rise as the rate gets to very high levels? I.e that everyone will just continue working/trading and will pay whatever is asked?

Most people will realise that the incentive to work and do business declines when tax rates are very high and that explains the drop off. We saw a good example in the UK in the 70's when the corporate tax rate was over 50%, the top income tax rate on earned income was 83% with a 15% surcharge for investment income. And they wondered why there was a brain drain and why they had to go cap in hand to the IMF....

 

[briantrumpet]

I'll explain the principle, which isn't too difficult to understand, but strangely lefties seem to struggle with it...

View attachment 8226

Tell me which bits you disagree with:
- Pretty clear that when the tax rate is zero, no tax is collected
- Similarly, when the tax rate is 100% (I.e. the state takes everything you earn) the tax collected will also be zero because nobody would bother doing any work on business.
- At somewhere in the mid range of tax rates, clearly tax is collected as we see this in pretty much every country.
- So going from the mid range to 100%, the tax collected must decline.

If you don't believe the Laffer curve, then are you saying that tax collected will stay constant or even rise as the rate gets to very high levels? I.e that everyone will just continue working/trading and will pay whatever is asked?

Most people will realise that the incentive to work and do business declines when tax rates are very high and that explains the drop off. We saw a good example in the UK in the 70's when the corporate tax rate was over 50%, the top income tax rate on earned income was 83% with a 15% surcharge for investment income. And they wondered why there was a brain drain and why they had to go cap in hand to the IMF....

Maybe you could read the wikipedia article, which covers all that, but also critiques it, as being too simplistic, and not borne out by evidence. Stating the bleedin' obvious about 0% and 100% tax rates being useless doesn't define where the optimal rate (if there is such a thing, where there are political choices to be made about how and who you tax, and what taxes are spent on) should be. Drawing a curve on a napkin doesn't make a strong argument for reducing taxes. Of course, you are free to argue for lower taxes, but if you think that's justified by a simplistic curve and without complex moral judgements, then we might as well replace parliament with accountants and AI.

And, as the wikipedia article points out, there are no real-life examples where 'Reaganomics' etc has had the effect proponents of the Laffer curve would have us believe: it's just increased debt and increased wage inequality. It's just used as a lazy 'trump card' to argue for tax cuts for the already wealthy.

 

[Ian H]

We're getting into the realms of bell-end curves here.

 

[C R]

Don't. Feed. The. Trolls.

 

[briantrumpet]

Don't. Feed. The. Trolls.

Just one more post should do it... 😜

 

[briantrumpet]

Just one more post should do it... 😜

I hope people are appreciating that I'm managing to slip in plenty of furrin words... I have a penchant for it.

 

[Stevo 666]

Maybe you could read the wikipedia article, which covers all that, but also critiques it, as being too simplistic, and not borne out by evidence. Stating the bleedin' obvious about 0% and 100% tax rates being useless doesn't define where the optimal rate (if there is such a thing, where there are political choices to be made about how and who you tax, and what taxes are spent on) should be. Drawing a curve on a napkin doesn't make a strong argument for reducing taxes. Of course, you are free to argue for lower taxes, but if you think that's justified by a simplistic curve and without complex moral judgements, then we might as well replace parliament with accountants and AI.

And, as the wikipedia article points out, there are no real-life examples where 'Reaganomics' etc has had the effect proponents of the Laffer curve would have us believe: it's just increased debt and increased wage inequality. It's just used as a lazy 'trump card' to argue for tax cuts for the already wealthy.

Which of the bullet point statements in my post above do you disagree with and why?

 

[briantrumpet]

 

[Stevo 666]

We're getting into the realms of bell-end curves here.

That's one one of your better contributions in the absence of a valid counter argument 🙂

 

[Rusty Nails]

I'll explain the principle, which isn't too difficult to understand, but strangely lefties seem to struggle with it...

View attachment 8226

Tell me which bits you disagree with:
- Pretty clear that when the tax rate is zero, no tax is collected
- Similarly, when the tax rate is 100% (I.e. the state takes everything you earn) the tax collected will also be zero because nobody would bother doing any work on business.
- At somewhere in the mid range of tax rates, clearly tax is collected as we see this in pretty much every country.
- So going from the mid range to 100%, the tax collected must decline.

If you don't believe the Laffer curve, then are you saying that tax collected will stay constant or even rise as the rate gets to very high levels? I.e that everyone will just continue working/trading and will pay whatever is asked?

Most people will realise that the incentive to work and do business declines when tax rates are very high and that explains the drop off. We saw a good example in the UK in the 70's when the corporate tax rate was over 50%, the top income tax rate on earned income was 83% with a 15% surcharge for investment income. And they wondered why there was a brain drain and why they had to go cap in hand to the IMF....

The Laffer Curve is a broad general theory rather than a specific rule. It will apply differently in different countries depending on many factors.

It can no more reliably used to set policy on tax levels than a 'parable' on tax levels of ten men in a bar.

 

[Stevo 666]

View attachment 8228

That's code for 'I can't disagree'. Job done 😉

 

[Stevo 666]

The Laffer Curve is a broad general theory rather than a specific rule. It will apply differently in different countries depending on many factors.

It can no more reliably used to set policy on tax levels than a 'parable' on tax levels of ten men in a bar.

Try telling me which bit you disagree with. See my bullet points above.

 

[briantrumpet]

 

[Stevo 666]

View attachment 8229

You're such a bad loser Brian.

 

[briantrumpet]

Don't. Feed. The. Trolls.

You're right.