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agent59717802 (November 30, 1999 at 12:00 am)
Dude,
Didn't you look at the initial explanation. The other factors are:
1. 7% population size
2. 44% cumulative inflation from 1980 to 1988
3. Revenue increased 5 times (400%)
Obviously the Laffer curve had a non trivial effect.
Cutplains (November 30, 1999 at 12:00 am)
Saying it don't make it so. Show us the math and the importance of each of the factors.
mossretard (November 30, 1999 at 12:00 am)
actually the Irish example kind of proves this, until 1990 or so Ireland was one of hte poorest countries in western europe despite an educated population they then cut corporate taxes and created incentive for high tech companies to come, Ireland now has the same GDP per capita as the United States after being a border line second world country until 1990
RHJunior (November 30, 1999 at 12:00 am)
"Voodoo economics?" Tell me, just how many different examples do you need that the Laffer Curve is a proven economic law?
20000miles (November 30, 1999 at 12:00 am)
I've said it before, the laffer curve is a sham based on no empirical evidence of research carried out by Art Laffer.
Here, Mr. Mitchell is trying to convince us that all birds are black by showing us a few ravens.
SupplySideRules (November 30, 1999 at 12:00 am)
Part3 patwayne2000. Japan, Germany and Spain, for instance, were "growth miracles" turned into nightmares of stagnation when government spending increased. Oil was 20% of GDP in 2005, it is unlikely that oil alone explains a 19% increase in tax collections. And how do yiu explain Ireland? Does Ireland has oil too? How do you explain Hong Kong that has no natural ressources but got the highest growth in the last 50 years? Why are so many countries adopting a flat tax if it is so bad?
SupplySideRules (November 30, 1999 at 12:00 am)
Part2 patwayne2000:as Ireland, New Zealand and UK got better economic growth. Higher government spending means higher taxes. Google "Fiscal Policy, Profits and Investment" and you will see how often government contractions are related to higher growth like what happened with Ireland, US, UK, New Zealand, Spain, Sweden, Finland, Estonia, Slovaquia, Russia and others that I do not remember when they reduced taxes. And EVERY OECD country sloweb their growth in 1960-1996 when they increased taxes
SupplySideRules (November 30, 1999 at 12:00 am)
Yes, please give the Calculus because I suppose you are assuming a constant elasticity all over the curve.
prestable (November 30, 1999 at 12:00 am)
4) If people go out of the formal sector, the deadweight loss associated with that choice is negligible because they are simply switching to the next best use of their time (by the envelope theorem)
prestable (November 30, 1999 at 12:00 am)
2) The revenue maximizing tax rate for a flat tax is equal to 1/(1+elasticity), (derived from simple calculus, which I will supply if you don't believe me) which means an elasticity of 3 would imply a rev. maximizing rate of 25%.
3) I'm sorry I didn't mean ideology. I misspoke (mistyped rather). I meant that blind dedication to any theory, including supply side theory, is not helpful to the discovery of truth. |
