Quote:
Originally posted by Mmmm, Burger (C.J.)
The dispute over the laffer curve is not whether in theory it is right. It is. The dispute is over the shape of the curve and where its peak (or peaks) are that maximize revenue, and also whether the revenue maximizing position changes in a dynamic, rather than static, world.
Put differently, you 1) have to know which side of the curve you are on. Even laffer's curve itself acknowledges that lowering taxes can lower revenues for a sizable range of tax rates. and 2) the fact that revenues go up in the short run from, e.g., a capital gains tax cut, does not mean that in the long run revenue will be higher, any more than sales volume during a promotional period can be used to predict overall sales.
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Agreed, although Wonk seems to think it has been disproved. I do not believe that's the case.
Wonk - here's a cheat sheet for you
http://en.wikipedia.org/wiki/Laffer_curve
