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

To: Peter Dierks who wrote (685509)	6/13/2005 7:54:24 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 769670

Message 21413212

To: Peter Dierks who wrote (685509)	6/13/2005 8:53:14 PM
From: Wayners	Read Replies (1) \| Respond to of 769670

The best way to explain the Laffer Curve is that If you set the tax rate at 0%, the revenues generated from that are 0. If you set the tax rate at 100%, the revenues generated from that are also 0. There is a optimal tax rate point which maximizes tax revenue. Finding that optimum rate can be theorized by mathematics, however the only real way to find it is by experimentation.

To: Peter Dierks who wrote (685509)	6/14/2005 11:02:36 AM
From: DuckTapeSunroof	Read Replies (2) \| Respond to of 769670

Peter, the only problem with the Laffer Curve (which everyone agrees with in principle) is that no one has ever figured out a way to be able to say where any country is on the curve at any given time! (Are we at the peak? Just to be left of the peak? On the right and declining slope? Out on an outlier? Within one S.D. of the apex??????) Another problem is that no one has been able to establish if the effect is indeed properly represented by a bell curve... or if the bell curve does not model the effect very well? If there is no known way to determine where one is on the curve (nor even if the 'curve' is properly fitted) they it has very little predictive ability, little utility in practical use. More of an admonition, really... or a useful bit of 'popular knowledge' and common sense... but not particularly testable. Most of the 'Laffer Curve' articles I've read in my life --- similarly to the one you posted --- seem to be pushing pre-determined conclusions... that rest on shaky and unverified assumptions. In other words... they are used as polemics, not as solid science.