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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: Neocon who wrote (589114)	7/9/2004 5:11:58 PM
From: Steve Dietrich	Read Replies (4) \| Respond to of 769670

<<There is a simple, logical argument for supply side: if you want more of something, subsidize it; if less, tax it, or raise taxes. This is the same principal which says that you can maximize aggregate return by cutting prices, because it increases demand. Of course, one has to seek the equilibrium price, but it is clear, in principle, that if you sell twice as many Snickers at fifty cents than you do at seventy five, you come out ahead at the lower price.>> There's something called the law of diminishing returns. Laffer himself speculated that the sweet spot on his curve was somewhere around 33%. The fact that Clinton raised taxes and revenues went up argues that we were too low on the curve. The same with Reagan's cut leading to a big drop in revenue. (Income tax revenue took until 1987 to recoup 1981 levels.) As usual, the data is opposite of the the theory you argue yet you never rethink your position. (And by you i mean supply siders in general.) I don't find that very rational. Steve Dietrich