The Laffer Curve Doesn't Work in America, but it Does Elsewhere

Discussion in 'Economy' started by Toro, Jan 17, 2008.

  1. Toro
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    Toro Diamond Member

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    The Laffer curve is irrelevant to today's American economy because tax rates are not high enough to effect a marginal increase in fiscal revenue. But tax cuts can increase revenues in jurisdictions where tax evasion is rampant.

    http://www.imf.org/external/pubs/cat/longres.cfm?sk=21558.0
     
  2. watermark
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    watermark Member

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    It's actually interesting... the "Laffer curve" was a keynesian idea. It's just that Keynes assumed the rate that would maximize income was about 90%. Laffer's innovation was assuming it was much lower. And it worked, to an extent.
     

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