19 September 2006

Laffering All the Way to the Bank

The Laffer Curve at work, once again.

As usual, it's a non-story as far as many outlets are concerned.

Surely, we'll see a story stating unequivocally that if the tax rate were doubled, revenues would also double.

Of course, past performance suggests that's a fantasy. But instead every time tax cuts lead to increased revenue, the fantasy as far as many are concerned, is that Laffer was right.

A good explanation of the Laffer Curve can be found at Heritage.org, written by the man himself.

Interestingly, he traces the curve back quite far (and see, Muslims have contributed something good, take that Byzantine Emperor Manuel II Palaiologos!)
The Laffer Curve, by the way, was not invented by me. For example, Ibn Khaldun, a 14th century Muslim philosopher, wrote in his work The Muqaddimah: "It should be known that at the beginning of the dynasty, taxation yields a large revenue from small assessments. At the end of the dynasty, taxation yields a small revenue from large assessments."

Also, a pun should be measured by how much it mangles the original word, this pun doesn't measure up, yet I couldn't resist. I'm a nerd, oh well, one day though, I'll be a CELEBRINERD!.

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