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Post by Tamrin on Feb 8, 2009 19:04:22 GMT 10
Back in 2006, we were told of:
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Post by Tamrin on Feb 8, 2009 19:17:13 GMT 10
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Post by Tamrin on Feb 8, 2009 19:47:14 GMT 10
Another way of looking at Laffer's Curve is from a Systems Theory perspective. Taking a person's work and disposable income to be interacting variables ordinarily maintained between close limits (or comfort zones) within a dynamic homeostasis, tax may be regarded as a stressor to this system. Increased taxes = less disposable income, which we might expect to trigger a negative feedback response, with increased work compensating by generating more. The alternative, to respond to increased taxes by saying, "I've now got less disposable income, so I'll cut back on work and thereby have even less," would be a positive feedback response which we would only expect to see in a system, pushed beyond its limits by stressors and now either spiralling out of control (as with stagflation) or making a downward, quantum shift to a new comfort zone. These would be pretty dramatic events, which ought to be clearly evident (not in the nature of Laffer's notion of fine tuning). In other words, "At what point on the tax scale would you give up working because the net income is no longer worth while?" And, "At what point would you decide to do with even less and cut back on work?" I suggest the two are likely to share the same point on the scale.
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Post by Tamrin on Feb 8, 2009 20:20:04 GMT 10
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Post by Tamrin on Feb 15, 2009 11:36:49 GMT 10
Blind faith in the efficacy of markets to effectively self regulate is a dangerous, superstitious dogma. Capitalism thrives in the West (or used to) because of, rather than in spite of, government intervention: Vanuatu Cargo Cult parade, invoking John Frum
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Post by Tamrin on Apr 26, 2009 19:17:45 GMT 10
The question is, do tax reductions increase or decrease government revenues? We might expect to see this reflected internationally between different tax rates. For instance, do nations with lower tax rates receive more or less revenues?
Beyond the hyperbole of 100% tax rates, I suggest with tax rates under, say 50%, people try to work to maintain their life styles. With double income households, overtime and two jobs being worked to match fairly inflexible perceptions of what disposable incomes are appropriate. The differential tax brackets here appear to demonstrate that people do not knock back work because they may have to pay higher taxes.
An analogy may be made with petrol prices: People complain about them but their consumption remains fairly constant: The commodity is considered have a relatively sticky or invariable demand (likewise with staple food prices - people have to eat). The main constants in life are said to be death and taxes and, while cogent arguments may be made for tax reductions, let us not kid ourselves that they actually result in increased government revenues, as has been proposed.
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Post by Tamrin on Apr 26, 2009 19:19:00 GMT 10
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Post by Tamrin on Dec 14, 2010 19:25:58 GMT 10
Another way of looking at Laffer's Curve is from a Systems Theory perspective.... "At what point on the tax scale would you give up working because the net income is no longer worth while?" And, "At what point would you decide to do with even less and cut back on work?" I suggest the two are likely to share the same point on the scale. Despite the cost of living, have you noticed how it remains so popular?
Anonymous
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Post by Smithee on Oct 21, 2012 9:54:52 GMT 10
Ideologues of all persuasions think they know how the economy will respond to the Admin- istration's strange mixture of Lafferism and monetarism. Indeed, their self-confidence is so vast, and their ability to rationalize so crafty, that one cannot imagine a scenario for the next few years, that they would regard as falsifying their dogma. The failure of any pre- diction can always be blamed on quirky political decisions or unforeseen historical events Martin Gardner (Born this day 1914)
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