There is a whole Guardianista / CiFuckedUp rant about the Laffer curve over here. Get over it, folks. The Laffer curve exists. We don't know its shape, how many maxima there may be, how to calculate where they might be (except experimentally) and there is even a valid argument that one of the underlying assumptions (100% tax equals zero revenue in the short term) is much weaker than the other two ('0% tax = 0% revenue' and 'some tax levels give positive revenue'.) (Ed notes: so it may actually not be of that much practical use. Like much else in economics.) But the fact that people you dislike use it as an argument for proposals you oppose no more discredits the theory than the fact that Young Earth Creationists use the fact that "Evilution" is a theory* rather than a fact means that the biblical creation story is the literal truth.
Then somebody takes this to the extreme:
At a properly enforced and managed 100% tax, you have maximum revenue.
I cannot get how somebody who seems not to be an utter dribbling moron (it is properly spelled and punctuated, grammatical and follows a logical, albeit incorrect, sequence) can actually believe such utter shite. The classic thing that differentiates the 'rich' from the 'wage slave' - however well-paid the latter - is the ability to move money about - invest rather than take income and shift in time. Take a capital gain (or a dividend) rather than pay and shift tax treatment. Don't work so hard - because you probably don't actually need the 250th £1000 - and earn less. An income / leisure trade off (as would be working a bit harder and taking enough extra income to be able to afford to pay a cleaner!) At 100% tax you will have the small dribble of revenue from those who cannot escape the strait-jacket. Nobody, not even the heros of socialist fuck-wittery, are going to drag themselves away from their Islington dinner parties to slave at their desks for all of the blooody money to go to the Government.
* Not only is the "Theory of Evolution" generally so called - it is also known to be an incorrect theory. Or, at least, an incomplete one. And very different now, not just to the initial outline from Darwin and Wallace, but also to the version I was taught in the mid-1980s. So it, as our knowledge improves, will itself continue to evolve.
2 comments:
" At a properly enforced and managed 100% tax, you have maximum revenue "
Sure, but you can only do this once. Thereafter, it would be pointless for anybody to bother earning anything. Then you get no tax revenue.
I'm not sure you can get money doing it even once - unless you backdate it.
In which case it is merely confiscation rather than taxation.
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