Having Fun Making Dave Look Dumb

[jordan179]

On http://chris-gerrib.livejournal.com/281933.html?view=676941#t676941, daveon expresses the belief that the Laffer Curve is a fantasy (so, by implication, assuming that he knows what IS the Laffer Curve one can raise the most revenues at 100% tax rates),

Comments

[kishiriadgr]

I'm still impressed by the fact that your online etiquette is worse than that of sf_drama. And they're /b/tards.

What makes this even worse is that I agree with you. Except for the whole "how we lose this war" thing because you still don't know your ass from your elbow about it.

[jordan179]

I'm still impressed by the fact that your online etiquette is worse than that of sf_drama. And they're /b/tards.

How dare I mention a discussion to which I posted and indicate that I would welcome others joining in! Why, didn't Hitler do that?

What makes this even worse is that I agree with you.

On the Laffer Curve, the relatively small size of the defense budget, and the dual utility of manned bombers? Ok ...

Except for the whole "how we lose this war" thing because you still don't know your ass from your elbow about it.

Ok, what do you think happens if we lose this war? We go home, they stop attacking us, peace prevails at least where America is concerned?

[kishiriadgr]

Trolling personal journals. I froth at you constantly here but do not invite others to do so.

I agree with you on the manned bombers. I admit to not knowing what a Laffer curve is.

"If by 'they' you mean the Taliban, if we left today they'd never attack here. It's not what they're interested in doing.

[jordan179]

I admit to not knowing what a Laffer curve is.

Picture a two-dimensional graph. The horizontal axis is "tax rate" (a percentage), running from 0 to 100 percent. The vertical axis is "tax revenue" (an absolute quantity measured in some stable monetary units).

Now, if we set tax rate at zero, tax revenue is obviously zero. If we set tax rate at 100 percent, tax revenue may be non-zero for one period of collection (because some people were working before the new tax policy was declared) but it will be effectively zero long-term (*)What is the shape of the line from 0 to 100 percent? Clearly, it is some form of curve, with revenue maximum appearing at some point of tax rate between 0 and 100 percent, not including those values

[chris_gerrib]

Neither Daveon or I dispute the existence of the Laffer Curve. The question, which you don't have an answer to, is at what point does the curve change from "more" to "less" revenue. What is the inflection point?

Since we don't know that inflection point, the curve is useless.

[gothelittle]

Since tax revenues increased when Bush cut taxes, we can be pretty certain that we are on the wrong side of the curve. From then on, all we need is incremental tax cuts spread out maybe once every two years until the tax revenue starts to drop.

Seems pretty simple to me.

[chris_gerrib]

Tax revenue did not increase nearly sufficiently to cover spending. Remember, Bush took a surplus and made it a deficit.

[irked_indeed]

Fair enough- spending's out of control. That doesn't seem to refute gothelittle's point, though, right?

[chris_gerrib]

Under the Laffer curve theory, the tax cuts should have paid for themselves. They did not. Spending added on top made the matter worse.

[irked_indeed]

To clarify: they didn't pay for themselves, or they didn't pay for all of the new spending Bush introduced on top of tax cuts?

[chris_gerrib]

They did not pay for themselves. The additional spending made matters worse.

[irked_indeed]

All right, help me, here, because I'm admittedly not a tax expert. If revenue went up with them, on what grounds do we say they didn't pay for themselves?

[chris_gerrib]

Simple example - reduce revenue by 3%. Hold outflow (or costs) constant. Assuming you started at revenue = outflow, reducing revenue by 3% equals a 3% deficit.

Now assume revenue grows by 2% but outflow doesn't. What's your deficit?

[irked_indeed]

1.06% of total income.

But it's not clear to me what maps to what in your example here. Are you saying "reduce by 3%" due to the tax cuts? If so, your model here does not represent that total revenue increases, as other folks have asserted.

[chris_gerrib]

Re-read the example, with artificial numbers. Revenue did increase. It did not increase enough to offset the lost revenue.