You can argue about the exact shape and slope of the Laffer curve, you can debate the possible lack of symmetry on it, you can even question exactly where on the curve we sit at any given moment. But I fail to see how an educated and even remotely sane person can debate the Laffer Curve’s existence.
- When we raise income taxes on the so-called “rich,” is the goal to punish the wealthy? Or to raise more revenue? If the goal is the former, go nuts raise tax rates to super high levels. If the goal is to raise more revenue, you likely need to ease back on the throttle.
- When we discuss “raising taxes,” do we mean raising the nominal income tax rates for the various brackets? Or do we mean increasing revenue, actual tax receipts? They are often not the same thing.
- Do incentives matter? (hint: they absolutely do)
[It's good to see a post on this at Our Dinner Table]
You gotta wonder about Robert Reich, he’s a very educated man. But based on his own words one can only assume that he’s more interested in “punishing” high earners than he is sound economic policy. See this from yesterday’s WSJ: Why 70% Tax Rates Won’t Work.
Alan Reynolds: Why 70% Tax Rates Won’t Work – WSJ.com: “Memo to Robert Reich: The income tax brought in less revenue when the highest rate was 70% to 91% than it did when the highest rate was 28%. … Rep. Jan Schakowsky (D., Ill.) and nine other House members to introduce the Fairness in Taxation Act in March. That bill would add five tax brackets between 45% and 49% on incomes above $1 million and tax capital gains and dividends at those same high rates. The academic left of the Democratic Party finds this much too timid, and would rather see income tax rates on the “rich” at Mr. Reich’s suggested levels—or higher.”