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Politics : Formerly About Advanced Micro Devices

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To: TimF who wrote (530916)	11/20/2009 12:32:03 AM
From: i-node	Read Replies (1) of 1576894

Most would say we aren't on the far side of the Laffer curve, meaning tax increases (at least if their not particularly perverse, or if their not directed against investment) would likely increase revenue. It really depends on what you cut taxes on. Historically, when you cut capital gains rates, you trigger sales (e.g., gains) that would otherwise be "locked up" in appreciating assets. Smart (read: big) investors choose the time carefully as to when capital gains should be liquidated. Right now, the mess of expiration of the Bush Tax Cuts and the pending Estate Tax nightmare scenarios make it really difficult to have any sense of what rate cuts of any kind would do. Also, a lot of people who are normally believers in supply side are very concerned about runaway deficits just now, so it is unclear how that might impact Laffer. Obviously, tax increases right now would be a very serious mistake as you say -- without regard for what one thinks about the Laffer Curve. Personally, I think he is going to propose tax increases in the State of the Union. A "Read My Lips" moment.

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