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The Laffer Curve: Grizz's First Lesson
#21
Sorry, Victor, but there are many ways to establish what is too much. You don't need the exact number. What is important is the broad historical proofs that Kurt Hauser showed that "No matter what the tax rates have been, in postwar America tax revenues have remained at about 19.5% of GDP." When you understand that Hauser's Law stipulates that raising rates has little effect on total revenue, the Laffer Curve is rather self-evident. The only way that 19.5% stays constant, is for higher rates to create a negative return, and for lower rates to encourage prosperity.

Jude Wanniski was at the dinner meeting with Ronald Reagan, Robert Mundell, Dick Cheney, and Jack Kemp when Art Laffer drew the famous curve on the napkin to give Mundell's explanation of the German Miracle and JFK's economic success the final touch to flesh out his monetary theory. He said at the time that the theory was well-established - but it took a life of its own when it so fully added common sense to Mundell's ideas.

Arthur Laffer Wrote:Since...'79...OK, let's take a look at what happened to marginal tax rates. The highest rate has gone from what -- 70 percent -- down to what, 35 percent? What's happened to inflation? What's happened to regulation restrictions? What's happened to America and the world? What's happened to the stock market? What's happened to everything you and I believe in? Do you remember what unemployment rates looked like back in 1979? Do you remember what the prime was when Ronald Reagan came into office on Jan. 20, 1981? It was 21 percent...

I cannot believe how wonderful it is. When (Nobel Prize-winning economist) Bob Mundell and I sat there at the University of Chicago in 1967, '68 and '69, we dreamt of a world. That world is now. Can you imagine a world with no inflation? Everything that's happened. It's absolutely spectacular. I'm just so happy about what's happened to this world. Don't you feel that way...?

If you looked at (House Minority Leader) Nancy Pelosi and you looked at (Senate Minority Leader) Harry Reid Wednesday night, they looked really, really uncomfortable. They were running everything in 1979. They had the president, the Senate, the Supreme Court, the Fed chairman. They had every damn position in the world. They had everything -- the states, the houses, the governors. It was a Fabian redistributionist nightmare. Now it's really beautiful. I'm an old man, and old men are supposed to be curmudgeons and hate the modern day and love the ancient. But the truth of the matter is, we've won.

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#22
Seems to me like a simple flat tax would create the most stable and fair tool to create equality. I wonder how much the federal government would be reduced and the tax payer burden reduced without the IRS
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#23
(02-02-2020, 01:38 AM)OMGitzHIM Wrote: Seems to me like a simple flat tax would create the most stable and fair tool to create equality. I wonder how much the federal government would be reduced and the tax payer burden reduced without the IRS

I agree.  But there is one thing it does that the Collectivists and Statists despise.  It would cause lesser government, and Collectivism only works when the State controls everything.  That's why Progressivism needs to be totally defeated.
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“Socialism always begins with a universal vision for the brotherhood of man and ends with people having to eat their own pets.”
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#24
In the Honor Harrington series, David Weber's planet of Manticore is a Contractual Monarchy, and the most economically successful group of planets in the galaxy. But when the war with Haven starts eating up funds, the basic imprimatur against progressive taxation is stopped by the need to raise money for the war. Even then, such a money grabber is only allowed to run until the next election. Economics has set rules, like Free Enterprise is the best system, but the bureaucrats are always finagling ways to redistribute, with themselves in charge of pocketing the most they can.

Science Fiction authors are always postulating how things may happen and how they can be tweaked for the better or worse. In the near future, automation and robotics will replace the menial worker. Those lowest quintile workers are the group Progressives take advantage of the most, and are the victims of their need for a dependent class. All the slums, barrios, and urban plantations are something they don't want to lose, for in their dependency lies their base of power. I've noted how Roddenberry had Kirk say his time doesn't use money anymore. Somehow, I think our Free Market will survive, but the way it does will evolve - hopefully without the redistributionist getting on top.
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#25
This should be a current thread. Laffer was ahead of the curve. The laffer curve is reality economics Any that still follow Keynesian are secondary scholars.
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