The Laffer Curve is a representation of the relationship between taxation rates and income. That is to say that it shows how much tax revenue you generate at varying levels of tax rates.
Wikipedia has a good article on it. It discusses some of the theoretical and empirical issues with the curve.
RationalWiki has a far lower quality article on it. It reads like a character assassination. For example, it claims that the Laffer Curve shows we should slash income tax and thus it must be wrong. This is nonsense. The Laffer Curve is a theoretical curve and does not have a concentre plot, so we cannot tell what it suggests.
Even when empirical data is used to actually plot the curve, most of the datasets suggest it should peak somewhere between 65-70%, which would suggest a rise in income tax.
RationalWiki can often be a good source for rubbishing some nonsense that you need to rebut. However, it is not without its own biases and political leanings.
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Tags: economics, laffer curve, rationalwiki
This entry was posted on Sunday, April 5th, 2015 at 11:03 am and is filed under Religion & Politics, Thoughts. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.