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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: RetiredNow who wrote (544271)	1/16/2010 11:23:48 AM
From: i-node	Read Replies (1) \| Respond to of 1587393

>> There's is this common misconception among the GOP that tax cuts are always good. The Laffer curve doesn't lead to such a misconception; you're talking about something different. Clearly, there is a rate below which revenue will decline. Neither Laffer, nor anyone else, has defined what that rate is. It is NOT, as bentway has ignorantly suggested, "50%". The Laffer curve was presented to a group of four politicians as parabolic in shape to simplify it. In reality, it is a higher-order function that has many inflections. The biggest single example is the capital gains rate -- different from the ordinary income rate -- which can cause huge surges in revenue (as it did in '03 and basically every time capgain rates have been cut). It is also affected by the total unrealized capital gains which will determine ultimately how much revenue can be raised. Other factors include such major items as corporate rates, AMT consequences, investment credits and accelerated depreciation, IRC Section 179, EITC, and tons of other provisions. The Laffer Curve is conceptual, and holds water, but far more complex in its implementation. There have been a couple of academics who have attempted to fit parameters to the curve but they are, at best, classified as "attempts". But we know the concept holds. The Laffer Curve "effect" did hold during the Bush years, however, as I've pointed out.

To: RetiredNow who wrote (544271)	1/16/2010 3:05:44 PM
From: Taro	1 Recommendation Read Replies (1) \| Respond to of 1587393

The Laffer curve definitely is real, even lefties like CJ agree on that. Now, that said, the only dispute educated people have is where we are and where we were on that curve during the different presidents. I believe Reagan started out well off the top to the left and I don't think he moved over it either. GWB may have hit the top and eventually hitting the right side but not much. Obama, of course, like most true leftists, totally deny the existence of a curve like that. With those guys the only points of agreement are that zero taxation and 100% taxation eventually - no, rapidly - lead to the same result: Zero tax revenues. /Taro