Talk:Laffer curve
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"The result of the tax cuts along with government spending policies of the era was large budget deficits."
No, it wasn't. The budget deficits were the result of the Congressional Democrats outspending the increased revenues by 2:1. In the 20s under Calvin Coolidge, in the 60s when Kennedy's proposed tax cuts were enacted after his assassination, and in the 80s, federal revenues increased after tax cuts. How can budget deficits be created when revenues are increased? By outspending them!
This is a gross oversimplification. The congressional Democrats were no more guilty of "outspending" than their Republican counterparts or, indeed, the Reagan administration itself. In particular Reagan's massive military buildup outweighed the meager spending cuts he was willing to accept. Haukurth 15:08, 25 Sep 2004 (UTC)
Consider: Because the current system taxes a larger percentage if your income is larger, and thus reaps a larger revenue, and because the people that get the lowest tax rates also need to make the least money, the net income for the amount of time spent working towards your gross income is largest if you are middle class. Being middle class requires less effort and risk than being upper class, and has more reward than being lower class. That might explain partially why people tend toward being middle class, and why the middle class is the largest class. - Augur
So the "Laffer curve" is not really a curve but rather the simple statement that there's a point of maximal revenues between 0 and 1? I had expected a "real" curve with a formula ... 193.171.121.30 07:30, 21 Feb 2005 (UTC)
- No there is no formula, but if you had one it could solve some problems. BrokenSegue 11:39, 20 Apr 2005 (UTC)
The weakness in the definition given here is that it states the only personal taxpayer reaction to a tax rate on the right hand side of the Laffer curve is to work less. While that is a primary reaction, the aggressive use of tax shelters (e.g. KPMG's latest apology) and the distortions high tax rates introduce into many investment decisions also need to be considered. -CA Dreamer