Today’s Brew 7-2-18

All good lessons in life return to the Laffer Curve. Kudos to Richard Rahn in his Washington Times column today.

Excerpt:

All governments tax and engage in some redistribution. Most taxation is coercive and enforced by the police powers of the state. And most people understand that some limited taxation and government is a price to be paid for a civil society. Implicitly people understand that government can be an effective means for protecting private property and person, and those basic functions need to be paid for.

Few object to a tax rate of 10 percent, and such a low rate has only a small disincentive effect on the willingness of the productive to work, save and invest. But as the tax rate increases, the disincentive effect also increases eventually to a point where the productive withdraw so much of their labor and investment that tax revenues actually fall (as illustrated by the Laffer Curve).

It is also well known that as government spending grows as a percentage of national income, it tends to both discourage personal responsibility for one’s economic well-being and becomes less efficient in how it is used, eventually resulting in negative economic growth (such as being experienced in Venezuela at the moment).

Read the entire editorial here.

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Today’s Brew 6-2-18

Today’s Brew 5-17-18

Dan Mitchell once again using the Laffer Curve to educate others.

California (Hopefully) Learns a Lesson about Marijuana Taxes and the Laffer Curve


Today’s Brew 5-11-18


Today’s Brew 3-10-18

Brian Domitrovic offers a concise history of tariffs at Forbes.com:

When Tariffs Worked

Excerpt:

A tariff “for revenue” was one where a rate was set low enough for the good in question to flow into the country in sufficient quantity to bring in increasing receipts to the government. A “prohibitive” tariff was one that was so high, receipts would go up if a rate were lowered. The “Laffer curve” concept was the most discussed theorem in political-economic debates in the United States in the 19th century.


Today’s Larry Kudlow radio program:

Today’s Brew 11-27-17



This is what we fight on a daily basis. Feel free to leave a comment if you are on Instagram:

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Today’s Brew ☕ 5-17-17

 

Dan Mitchell does what Dan Mitchell does with the Laffer Curve: He learns from it, applies lessons elsewhere, and makes us all smarter.

Learning from the United Kingdom about the Laffer Curve, Dynamic Scoring, and Class-Warfare Taxes

Excerpt:

As far as I’m concerned, no sentient human being could look at what happened in the United States in the 1980s and not agree that high tax rates on upper-income taxpayers are foolish and self-destructive.

Not only did the economy grow faster after Reagan lowered rates, but the IRS even collected more revenue (a lot more revenue) because rich people earned and reported so much additional income.

That should be a win-win for all sides, though there are some leftists who hate the rich more than they like additional revenue.

Anyhow, I raise this example because there are politicians today who think it’s a good idea to go back to the punitive tax policy that existed in the 1970s.