Supply-Side Economics

[whell]

Originally Posted by finnbow

You said you knew exactly where we were on the Laffer curve. Show me.

No, I didn't say that, and I explained it. Go back and read again if you didn't understand.

Originally Posted by finnbow

Of course it's arguable. The economy is multi-faceted and doesn't depend on one thing like tax rates.

That wasn't the question. I'll ask it again, (and you'll probably avoid it again):

Is it likely that an economy will have more capital formation and conversion as the tax rate on capital gains goes down?

You also avoided the other question:

As the tax on income approaches 100%, does the revenue from that tax keep going up, or does it start to go down?

[finnbow]

Originally Posted by whell

No, I didn't say that, and I explained it. Go back and read again if you didn't understand.

Uh, yes you did - "You always know where you are on both the X and Y axis."

Laffer never assumed that there was a single variable at work.

Sorry, but yes he did. A smooth parabola such as his describes a specific relationship of one variable to another (the dependent variable (revenue) and the independent variable (tax rate)) and no other variables. And that's exactly why it's completely worthless as an economic model, considering the number of variables that impact the nation's economy, not to mention the illegitimacy of the underlying model (he has/had no data points with which to establish the relationship between tax rates and revenue).

Is it likely that an economy will have more capital formation and conversion as the tax rate on capital gains goes down?

Debatable. Most equity investors don't invest in equities strictly due to favorable capital gains treatment. They do so because in the long run, equities generally outperform bonds. In any event, the latest GOP tax plan didn't touch capital gains while it gave huge contraindicated income tax breaks to the wealthy.

You also avoided the other question:

As the tax on income approaches 100%, does the revenue from that tax keep going up, or does it start to go down?

It does the same thing as it does when tax rates go to zero. It's a no-brainer that a 0% and a 100% tax rate will result in no revenue. There's never been any argument about that. It's every other point on the Laffer Curve that is suspect and Laffer's theory represents nothing other than a drunken doodle on a cocktail napkin that somehow became conservative economic dogma without a shred of evidence to support it (and plenty to refute it).

(T)his tidy arc of cause and consequence (of the Laffer curve) doesn’t exist in the real world. Sure, extremely high tax rates douse economic activity. But there’s no reason to assume the relationship between tax revenue and tax rates is perfectly U-shaped. And the equilibrium point at which a government collects the most revenue possible without dragging down the economy is impossible to know—and varies by country. There was no reason in 1974—or, for that matter, now—to think the US was on the curve’s “prohibitive” half (many economists put the inflection point for the highest marginal tax rate at around 70%). In fact, without detailed data, you can’t tell where on Laffer’s curve (or non-curve) you are at all.

https://qz.com/895785/laffer-curve-e...d-reaganomics/

[whell]

Originally Posted by finnbow

Sorry, but yes he did. A smooth parabola such as his describes a specific relationship of one variable to another (the dependent variable (revenue) and the independent variable (tax rate)) and no other variables. And that's exactly why it's completely worthless as an economic model, considering the number of variables that impact the nation's economy, not to mention the illegitimacy of the underlying model (he has/had no data points with which to establish the relationship between tax rates and revenue).

You are so screwed up here. The Laffer curve that you refer to above isn't the entirety of supply side theory, but rather an illustration of a single aspect of it. You're talking about it like it represents the theory in its entirety. No wonder you're confused....or just being a demigog.

[finnbow]

Originally Posted by whell

You are so screwed up here. The Laffer curve that you refer to above isn't the entirety of supply side theory, but rather an illustration of a single aspect of it. You're talking about it like it represents the theory in its entirety. No wonder you're confused....or just being a demigog.

Nope. Conservative supply-side theory's foundational document was a sketch on the back of a napkin by Art Laffer for Dick Cheney and Donald Rumsfeld. No fucking wonder it's such a shambolic piece of shit when you consider it was the drunken idea of three half-wits.

https://www.bloomberg.com/news/artic...side-economics

And it's "demagogue," like your dear Trumpenfuhrer.

[whell]

Originally Posted by finnbow

Nope. Conservative supply-side theory's foundational document was a sketch on the back of a napkin by Art Laffer for Dick Cheney and Donald Rumsfeld. No fucking wonder it's such a shambolic piece of shit when you consider it was the drunken idea of three half-wits.

https://www.bloomberg.com/news/artic...side-economics

And it's "demagogue," like your dear Trumpenfuhrer.

Again, you distort. You deride the theory by talking about the failures of those who (mis)applied it. I've covered this already as well in prior posts. Enjoy talking in circles, do ya?

[finnbow]

Originally Posted by whell

Again, you distort. You deride the theory by talking about the failures of those who (mis)applied it. I've covered this already as well in prior posts. Enjoy talking in circles, do ya?

It seems to me that if a theory is based upon a fundamentally specious notion and fails spectacularly every single time it's tried, it's a scam. However, being that modern US conservatism has now become a belief-system based upon conspiracy theories and fake news, it's little wonder that you ascribe to it wholeheartedly.

Supply-side economics has as much intellectual heft as Hillary running a child-sex ring out of pizzeria's basement (that doesn't even have a basement).