Comments on: “Are you now or have you ever been a Lafferite?” — Republican officials quoted on-record http://content.ksg.harvard.edu/blog/jeff_frankels_weblog/2008/04/03/%e2%80%9care-you-now-or-have-you-ever-been-a-lafferite%e2%80%9d-republican-officials-quoted-on-the-record/ Views on the Economy and the World Mon, 06 Oct 2008 17:58:11 +0000 http://wordpress.org/?v=2.5.1 By: eve isk http://content.ksg.harvard.edu/blog/jeff_frankels_weblog/2008/04/03/%e2%80%9care-you-now-or-have-you-ever-been-a-lafferite%e2%80%9d-republican-officials-quoted-on-the-record/#comment-521 eve isk Tue, 22 Apr 2008 07:35:43 +0000 http://content.ksg.harvard.edu/blog/jeff_frankels_weblog/2008/04/03/%e2%80%9care-you-now-or-have-you-ever-been-a-lafferite%e2%80%9d-republican-officials-quoted-on-the-record/#comment-521 Administration (excluding most CEA members) deliberately sought to assert the Administration (excluding most CEA members) deliberately sought to assert the

]]> By: jfrankel http://content.ksg.harvard.edu/blog/jeff_frankels_weblog/2008/04/03/%e2%80%9care-you-now-or-have-you-ever-been-a-lafferite%e2%80%9d-republican-officials-quoted-on-the-record/#comment-379 jfrankel Sat, 12 Apr 2008 15:07:58 +0000 http://content.ksg.harvard.edu/blog/jeff_frankels_weblog/2008/04/03/%e2%80%9care-you-now-or-have-you-ever-been-a-lafferite%e2%80%9d-republican-officials-quoted-on-the-record/#comment-379 Everyone can read the quotes for themselves and make up their own minds. It's true that one or two of the quotes might be read subtly as saying that because tax cuts stimulate income, the fall in tax revenue is not quite as bad as one would otherwise assume. But most of the quotes are too unambiguous to allow that interpretation. And there can be little question, taking all the quotes together, that the Bush Administration (excluding most CEA members) deliberately sought to assert the Laffer proposition. -- JF Everyone can read the quotes for themselves and make up their own minds. It’s true that one or two of the quotes might be read subtly as saying that because tax cuts stimulate income, the fall in tax revenue is not quite as bad as one would otherwise assume. But most of the quotes are too unambiguous to allow that interpretation. And there can be little question, taking all the quotes together, that the Bush Administration (excluding most CEA members) deliberately sought to assert the Laffer proposition. — JF

]]> By: More quotes from Bush White House affirming the Laffer Hypothesis | Jeff Frankels Weblog | Views on the Economy and the World http://content.ksg.harvard.edu/blog/jeff_frankels_weblog/2008/04/03/%e2%80%9care-you-now-or-have-you-ever-been-a-lafferite%e2%80%9d-republican-officials-quoted-on-the-record/#comment-377 More quotes from Bush White House affirming the Laffer Hypothesis | Jeff Frankels Weblog | Views on the Economy and the World Sat, 12 Apr 2008 14:58:20 +0000 http://content.ksg.harvard.edu/blog/jeff_frankels_weblog/2008/04/03/%e2%80%9care-you-now-or-have-you-ever-been-a-lafferite%e2%80%9d-republican-officials-quoted-on-the-record/#comment-377 [...] my earlier post, I catalogued some quotes from high Bush Administration officials asserting the Laffer [...] [...] my earlier post, I catalogued some quotes from high Bush Administration officials asserting the Laffer [...]

]]> By: Chuckles http://content.ksg.harvard.edu/blog/jeff_frankels_weblog/2008/04/03/%e2%80%9care-you-now-or-have-you-ever-been-a-lafferite%e2%80%9d-republican-officials-quoted-on-the-record/#comment-341 Chuckles Tue, 08 Apr 2008 17:52:04 +0000 http://content.ksg.harvard.edu/blog/jeff_frankels_weblog/2008/04/03/%e2%80%9care-you-now-or-have-you-ever-been-a-lafferite%e2%80%9d-republican-officials-quoted-on-the-record/#comment-341 I think that you put Lazear and possibly even Snow in the wrong group. They are not making that patently absurd claim that lower tax rates (from our current baseline) will yield increased receipts. Lazear is saying--very subtly, to be sure--that tax cuts have a stimulative effect and they can lead to *lower than predicted* losses. Snow is a closer call but he can read to be saying something very similar. I think that you put Lazear and possibly even Snow in the wrong group. They are not making that patently absurd claim that lower tax rates (from our current baseline) will yield increased receipts.

Lazear is saying–very subtly, to be sure–that tax cuts have a stimulative effect and they can lead to *lower than predicted* losses. Snow is a closer call but he can read to be saying something very similar.

]]> By: George Bush » “Are you now or have you ever been a Lafferite?” Republican … http://content.ksg.harvard.edu/blog/jeff_frankels_weblog/2008/04/03/%e2%80%9care-you-now-or-have-you-ever-been-a-lafferite%e2%80%9d-republican-officials-quoted-on-the-record/#comment-320 George Bush » “Are you now or have you ever been a Lafferite?” Republican … Fri, 04 Apr 2008 23:06:36 +0000 http://content.ksg.harvard.edu/blog/jeff_frankels_weblog/2008/04/03/%e2%80%9care-you-now-or-have-you-ever-been-a-lafferite%e2%80%9d-republican-officials-quoted-on-the-record/#comment-320 [...] jfrankel wrote an interesting post today on â [...] jfrankel wrote an interesting post today on â

]]> By: Tax » “Are you now or have you ever been a Lafferite?” Republican … http://content.ksg.harvard.edu/blog/jeff_frankels_weblog/2008/04/03/%e2%80%9care-you-now-or-have-you-ever-been-a-lafferite%e2%80%9d-republican-officials-quoted-on-the-record/#comment-318 Tax » “Are you now or have you ever been a Lafferite?” Republican … Fri, 04 Apr 2008 19:13:22 +0000 http://content.ksg.harvard.edu/blog/jeff_frankels_weblog/2008/04/03/%e2%80%9care-you-now-or-have-you-ever-been-a-lafferite%e2%80%9d-republican-officials-quoted-on-the-record/#comment-318 [...] jfrankel wrote an interesting post today on â [...] jfrankel wrote an interesting post today on â

]]> By: Dean S http://content.ksg.harvard.edu/blog/jeff_frankels_weblog/2008/04/03/%e2%80%9care-you-now-or-have-you-ever-been-a-lafferite%e2%80%9d-republican-officials-quoted-on-the-record/#comment-317 Dean S Fri, 04 Apr 2008 15:41:47 +0000 http://content.ksg.harvard.edu/blog/jeff_frankels_weblog/2008/04/03/%e2%80%9care-you-now-or-have-you-ever-been-a-lafferite%e2%80%9d-republican-officials-quoted-on-the-record/#comment-317 What is so pathetic about the Lafferite comments is the underlying assumption that the relationship between tax rates and tax revenue is inverse, linear and infinite, that you can keep cutting taxes forever and keep on getting the same unchanged increase in revenue. Common sense tells us that the relationship between tax rates and tax revenue has to be arc or parabola shaped. Think of a chart where the horizontal axis represents the tax rate and the vertical axis represents tax revenue. Obviously there is some point where the tax rate is so high that business activity falls off and tax revenues decline. Likewise, there is has some point where the tax rate is so low that government is unable to provide or maintain a supportive infrastructure for business and commerce, the economy suffers as result, and tax revenue falls off. The search should be for the optimal tax rate where the parabola representing revenue peaks. I do think it is interesting that liberals always think we are to the "left" of the top of the parabola and can grow the economy with a little more government investment, while conservatives always think we are to the "right" the top of the parabola. What is so pathetic about the Lafferite comments is the underlying assumption that the relationship between tax rates and tax revenue is inverse, linear and infinite, that you can keep cutting taxes forever and keep on getting the same unchanged increase in revenue.

Common sense tells us that the relationship between tax rates and tax revenue has to be arc or parabola shaped. Think of a chart where the horizontal axis represents the tax rate and the vertical axis represents tax revenue.

Obviously there is some point where the tax rate is so high that business activity falls off and tax revenues decline. Likewise, there is has some point where the tax rate is so low that government is unable to provide or maintain a supportive infrastructure for business and commerce, the economy suffers as result, and tax revenue falls off.

The search should be for the optimal tax rate where the parabola representing revenue peaks.

I do think it is interesting that liberals always think we are to the “left” of the top of the parabola and can grow the economy with a little more government investment, while conservatives always think we are to the “right” the top of the parabola.

]]> By: Taxes http://content.ksg.harvard.edu/blog/jeff_frankels_weblog/2008/04/03/%e2%80%9care-you-now-or-have-you-ever-been-a-lafferite%e2%80%9d-republican-officials-quoted-on-the-record/#comment-314 Taxes Thu, 03 Apr 2008 22:20:10 +0000 http://content.ksg.harvard.edu/blog/jeff_frankels_weblog/2008/04/03/%e2%80%9care-you-now-or-have-you-ever-been-a-lafferite%e2%80%9d-republican-officials-quoted-on-the-record/#comment-314 [...] Brian wrote an interesting post today onHere’s a quick excerptAlso: “The increase in revenues should be financed not by new and higher taxes, but by lower tax rates that would produce more money for the government by stimulating higher earnings by corporations and workers…” (p.173). … [...] [...] Brian wrote an interesting post today onHere’s a quick excerptAlso: “The increase in revenues should be financed not by new and higher taxes, but by lower tax rates that would produce more money for the government by stimulating higher earnings by corporations and workers…” (p.173). … [...]

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