That's the trouble with the empirical testing of Laffer effects. Your selected timeframe has an inverse relationship with the revenue maximizing rate of taxation. The tax policy that maximizes revenue over the next hour is to confiscate everything. The revenue maximizing tax policy over the next century is to tax at some lesser rate that anticipates the formation of capital to expand the tax base. Depending on the time frame you chose, you can conclude that t is currently on whatever side of t* you prefer so as to make the case for a tax cut or a tax hike.
jlw
Stephen Miller wrote:
So it worked in the short run, and in the long run they were all dead!
On Apr 21, 2005, at 5:10 PM, Bryan Caplan wrote:
Yes, but ag collectivization in the USSR DID raise additional government revenue, at least in the short-run. The people starved, production fell, but Stalin got more grain to feed the cities and export. At least that's my recollection from Conquest.
Of course, productivity growth in agriculture was very low afterwards, fitting my long-run Laffer curve story! -- Prof. Bryan Caplan Department of Economics George Mason University http://www.bcaplan.com [EMAIL PROTECTED] http://econlog.econlib.org
"[M]uch of the advice from the parenting experts is flapdoodle. But surely the advice is grounded in research on children's development? Yes, from the many useless studies that show a correlation between the behavior of parents and the behavior of their biological children and conclude that parenting shapes the child, as if there were no such thing as heredity." --Steven Pinker, *The Blank Slate*
"When a pitcher's throwing a spitball, don't worry and don't complain, just hit the dry side like I do." - Stan Musial
.
