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Topic: Laffer curve


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Tax

In the News (Thu 25 Apr 19)

  
  Thomas E. Nugent on the Laffer Curve and Chris Rohmann on NRO Financial   (Site not responding. Last check: 2007-10-30)
The Laffer curve is a unique pedagogical device that captures the important role of incentives in a free economy.
The principal of the Laffer curve is present in virtually every business decision where the overall objective is to maximize profitability through the determination of setting prices consistent with the ability and desire of the consumer to buy.
The Laffer curve was used to justify large tax cuts in the early 1980s, when President Reagan’s economic advisors were convinced that tax rates had passed the optimal level.
www.nationalreview.com /nrof_nugent/nugent200404210842.asp   (1232 words)

  
  Laffer curve - Wikipedia, the free encyclopedia
Others respond that, even if the Laffer Curve itself is a static model, a programme of tax cuts nevertheless provides incentives for innovation and investment, which will increase the rate of economic growth, as predicted by endogenous growth theory.
The satire illustrates the major fallacy commonly committed with the Laffer curve, namely the assumption that the middle is smooth and orderly merely because the two extreme endpoints are well-defined.
However the Laffer curve should not be taken as a literal model for a tax revenue curve, especially in debates between relatively moderate amounts of taxation.
en.wikipedia.org /wiki/Laffer_curve   (1965 words)

  
 Arthur Laffer - Wikipedia, the free encyclopedia
Laffer is best known for the Laffer curve, which asserts that in certain situations, a decrease in tax rates could result in an increase in tax revenues.
Laffer's innovation was to state that the inflection point in the curve was at a much lower level than previously believed: so low that current tax rates were above the level where revenue is maximized.
Earlier in his USC tenure, Laffer played a key role in the writing of Proposition 13, the still-controversial California property tax cap initiative that spawned a host of similar laws around the United States and is generally credited with launching the tax revolt of the 1970s and 1980s.
en.wikipedia.org /wiki/Arthur_Laffer   (4692 words)

  
 Economics and...: Dangerous Curve
My understanding of the Laffer curve is that it is a poor man's version of Mirrlees' earlier work on revenue maximizing income tax rates based on elasticities of income and substitution effects.
Laffer seems to have more or less assumed (without a lot of empirical evidence as best I can tell) that the revenue maximizing rate was 50%.
One consequence of the Laffer curve was that if tax rates were too high (i.e, > 50%) then substitution effects would dominate and the overall supply curve for the economy would shift to the left because productive entrepreneurs would withhold labor and take more leisure.
knzn.blogspot.com /2006/08/dangerous-curve.html   (1627 words)

  
 ☞ reference - laffer curve - laffer curve online guide   (Site not responding. Last check: 2007-10-30)
As legend has it, the famous Laffer Curve was first drawn by economist Arthur Laffer in 1974 on a cocktail napkin during a small dinner meeting at the Washington Hotel attended by the late Wall Street...
Laffer and other right-wing economists used the curve to argue that taxes were...
In Section 3 the Laffer curve is derived from the equilibrium conditions for the...
www.4-web-reference.info /curve/laffer-curve.html   (583 words)

  
 Some Observation on the Laffer Curve
The Laffer curve as derived in the preceding section was based on the fact that the level of employment was negatively related to the tax rate.
The Laffer curve is often used to explain the behavior of a revenue-maximizing bureaucracy.
Because the Laffer curve is generally connected with standard macroeconomic analysis it remains an unsatisfactory analytical tool because it tends to conceal the fact that the optimal size of government is zero.
www.gmu.edu /jbc/fest/files/Monissen.htm   (3474 words)

  
 The Laffer Curve   (Site not responding. Last check: 2007-10-30)
Laffer may have been a bit dumb (and frankly he was never a leading intellect in economics ever; he got by with his connections and charm, both of which were considerable), but he is not stupid.
Laffer hardly "invented" the curve, but because most people have no reason to study academic economics they are easily buffaloed into believing that nonsense.
The Laffer Curve doesn't provide any useful predictive information, because there is no way to apply numbers to the curve, or in fact know what its shape is. You have two problems: you have no way of knowing where you are on a curve whose shape you also can't draw.
www.freerepublic.com /focus/f-news/1068755/posts   (4836 words)

  
 Laffer Curve   (Site not responding. Last check: 2007-10-30)
A typical Laffer curve is reproduced in the figure.
The mistake of the Reagan administration was to ignore the difference between the expansionary monetary policy that accompanied the 1964 tax cut and the restrictive policy that accompanied the 1981 and 1982 stages of the Reagan tax cuts.
But in 1981 and 1982 the IS curve moved to the right while the LM curve moved to the left by a greater distance, thus creating a recession.
www.sjsu.edu /faculty/watkins/econ202/laffercurve.htm   (480 words)

  
 The Laffer Curve: Past, Present, and Future
I used the so-called Laffer Curve all the time in my classes and with anyone else who would listen to me to illustrate the trade-off between tax rates and tax revenues.
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.
Figure 1 is a graphic illustration of the concept of the Laffer Curve--not the exact levels of taxation corresponding to specific levels of revenues.
www.heritage.org /Research/Taxes/bg1765.cfm   (4776 words)

  
 ART_LAFFER definition , Term Papers on ART_LAFFER by essay 411
Laffer is best known for the Laffer curve, which demonstrates that in certain situations, a decrease in tax rates could result in an increase in tax revenues.
Laffer's innovation was to state that the inflection point in the curve was at a much lower level than previously believed: so low that current tax rates were above the level where revenue is maximized.
Earlier in his USC tenure, Laffer played a key role in the writing of Proposition 13, the still-controversial California property tax cap initiative that spawned a host of similar laws around the United States and is generally credited with launching the tax revolt of the 1970s and 1980s.
www.essay411.com /art-laffer.html   (4986 words)

  
 Arthur B. Laffer - SourceWatch
Arthur B. Laffer is Co-Chairman of the Policy Council for the Free Enterprise Fund.
According to his FEF profile, Laffer is also "the founder and chairman of Laffer Associates, an economic research and consulting firm that provides investment-research services to institutional asset managers.
His creation of the Laffer Curve was deemed a 'memorable event' in financial history by the Institutional Investor in its July 1992 Silver Anniversary issue, The Heroes, Villains, Triumphs, Failures and Other Memorable Events.
www.sourcewatch.org /index.php?title=Arthur_B._Laffer   (590 words)

  
 willzhead: The End of the Laffer Curve
Laffer posited the theory that if you reduced marginal tax rates people would not only spend more but they would create greater amounts of tax revenue.
Laffer posited this theory in 1974 but, even at that time, was short on statistical or historical evidence to support his idea.
The basis of the Laffer Curve is precisely what you stated, that, if government intervention on the supply side of the economy worked it would provide more than sufficient revenue to balance the budget.
willzhead.typepad.com /willzhead/2006/06/the_end_of_the_.html   (1670 words)

  
 QandO: The Laffer Curve
The Laffer Curve is valid, I believe, but must be placed in the context of time.
The Laffer curve says absolutely nothing about the real world where we are facing the fiscal trifecta of Social Security and Medicare unfunded liabilities in addition to the alternative minimum tax crunch and our ballooning trade deficit.
Posted by: Gary Boatwright at August 29, 2004 02:06 PM The Laffer curve says absolutely nothing about the real world where we are facing the fiscal trifecta of Social Security and Medicare unfunded liabilities in addition to the alternative minimum tax crunch and our ballooning trade deficit.
qando.net /archives/003912.htm   (2636 words)

  
 'Laffer Curve' Author Visits BC   (Site not responding. Last check: 2007-10-30)
Laffer, whose daughter Allison is a member of the BC Class of 2006, was chief economist for the Office of Management and Budget under President Ronald Reagan.
He is chiefly known as the author of the "Laffer Curve," which he used as the basis for his argument that high tax rates serve to decrease tax revenue for the government.
The speech by Laffer, who is chairman of a San Diego-based international economic research and consulting firm, will be available on streaming video through the Boston College "Front Row" web site.
www.bc.edu /bc_org/rvp/pubaf/chronicle/v11/a24/laffer.html   (147 words)

  
 Memo, 3-12-98; Defending the Laffer Curve
Twenty years after I named the "Laffer Curve" after the Chicago professor of economics, Arthur B. Laffer, who drew it on a cocktail napkin in 1974, your columnist Gene Epstein still has not taken the trouble to find out what it means.
He is incorrect in stating that the Laffer Curve -- which is simply the Law of Diminishing Returns as it is applied to tax policy -- is a "cornerstone" of supply-side economics.
In the private sector, the Laffer Curve is understood as being axiomatic.
www.polyconomics.com /searchbase/03-12-98.html   (492 words)

  
 Tax - Wikipedia, the free encyclopedia
For goods with inelastic demands (at least in the short-run) like cigarettes, and gasoline almost all of the tax is paid by the consumer.
Alternatively, for goods with inelastic supply curves, like event tickets where seats remain fixed, the producer bears almost all, if not all, of the tax.
Laffer curve and the optimal tax rate argument
en.wikipedia.org /wiki/Tax   (6307 words)

  
 ☞ reference - Curve   (Site not responding. Last check: 2007-10-30)
In mathematics, the concept of a curve tries to capture the intuitive idea of a geometrical one-dimensional and continuous object.
The Hubbert curve, named after the geophysicist M. King Hubbert, is the derivative of the logistic function.
The Altoona Curve and beautiful Blair County Ballpark offer local, regional and national businesses a prime venue to reach a captive audience of over 400,000 Curve fans from throughout Central and...
www.reference-101.info /curve   (304 words)

  
 The Smith Center: Laffer Curve Conference   (Site not responding. Last check: 2007-10-30)
Laffer orginated the Laffer Curve idea, and Baird, Lee, and Clark originated the idea for this conference.
Laffer inspired the Reagan tax rate cuts of the early eighties.
Charles W. Baird, director of the Smith Center, presented a paper in which he argued that if unions are successful in getting new laws passed that make it easier for them to capture more dues payer, the eventual result will be a substantial decline in the percent of the private sector workforce that is unionized.
www.sbe.csuhayward.edu /~sbesc/laffer.html   (196 words)

  
 The Unrepentant Individual » The Useless Laffer Curve
The problem is that the Laffer Curve is a static analysis.
One of the intelligent leftists I typically debate with has said that it’s nearly impossible to be on the right side of the Laffer Curve.
I think the Laffer Curve can be applied more directly to tax avoidance and evasion, although it’s not typically done.
unrepentantindividual.com /2005/10/02/the-useless-laffer-curve   (941 words)

  
 The Speaker throws a Laffer curve | Political Insider | ajc.com
The news is that the House speaker said he’s hired as a consultant the economist Arthur Laffer, who introduced Ronald Reagan to the concept of cutting taxes to increase economic activity — and government revenue.
I admit not knowing much about Laffer but I am sure he is no more talented than what we already have in Georgia in both our private and academic arenas.
He is an economist educated at the very prestigious University of Chicago School of Economics (home of Milton Friedman and many other Nobel Prize winners) and he could get the Nobel Prize for the Laffer Curve, that demonstrated that tax revenues will fall if taxes are too high.
www.ajc.com /metro/content/shared-blogs/ajc/politicalinsider/entries/2007/01/05/the_speaker_throws_a_laffer_cu.html   (571 words)

  
 Ashish's Niti: So what's wrong with the Laffer Curve?
Laffer is the father of the "Laffer Curve", the idea that tax cuts will not increase the budget deficit but would rather be self-financing given the strong suplly side response of labor, savings and investment to tax cuts.
The trouble with the Laffer curve is that it's based on the notion that the purpose of taxes is to fund the operations of the government.
One of the misconceptions of the Laffer Curve is that there is only one tax rate that will raise a certain amount of revenue.
ashish.typepad.com /ashishs_niti/2005/07/so_whats_wrong_.html   (926 words)

  
 A Basic Introduction To Economics (Supply & Demand And The Laffer Curve)   (Site not responding. Last check: 2007-10-30)
The descending line of P 90 d s d's is the "demand curve".
Where the line crosses the supply curve tells the quantity the suppliers are willing to sell at that price.
The above curve is called the Laffer Curve, after its developer economist Arthur Laffer.
home.rica.net /cbolton/ECON.HTM   (2561 words)

  
 Sketching the Laffer Curve   (Site not responding. Last check: 2007-10-30)
One of the most important economic events of the last half-century was Arthur Laffer's drawing of his famous "Laffer Curve" on a cocktail napkin in 1974.
The Laffer Curve helped launch the Reaganomics Revolution here at home and a frenzy of tax rate cutting around the globe that continues to this day.
Having been prepped by Laffer in the three previous years, it was clear to me that Mundell was right and conventional wisdom, which was that the economy was just fine, was wrong.
www.yorktownpatriot.com /printer_78.shtml   (1208 words)

  
 WILLisms.com: The Laffer Curve Lives!
The SocialSecurityChoice.com blog explains the Laffer curve and how Bush's tax relief has actually increased revenues coming into the government.
When sketched as a graph on a cocktail napkin, this economic truth is known as 'the Laffer Curve'.
(Also, I think that some have estimated that the tax rate at which the Laffer Curve is at its peak may be in the 80% range, and we're nowhere near that point.
www.willisms.com /archives/2005/02/the_laffer_curv.html   (743 words)

  
 Message
The Laffer Curve illustrates the basic idea that changes in tax rates have two effects on tax revenues: the arithmetic effect and the economic effect.
The arithmetic effect is simply that if tax rates are lowered, tax revenues (per dollar of tax base) will be lowered by the amount of the decrease in the rate.
In addition, there may not be a more pure expression of the Laffer Curve revenue response than what has occurred following past changes to the capital gains tax rate.
www.zianet.com /nmiri/e_laffercurve.htm   (1343 words)

  
 Laffer Curve
Named after American economist Arthur B. Laffer, who maintained that economic expansion could be achieved without government budget deficits.
Laffer curve shows the tax-rate at which government tax revenue is maximized, after which it declines.
Laffer curve implies that there is a maximum amount of tax that a government can raise, therefore there is a ceiling to the level of public goods which can be provided.
www.economyprofessor.com /economictheories/laffer-curve.php   (282 words)

  
 The Laffer Curve
Some of you may share the mistaken belief that the Laffer Curve, named for Dr. Arthur Laffer, was tested and found wanting during the Reagan Administration.
The problem people tend to have regarding the Laffer Curve is that they confuse economics with their political considerations.
The Laffer Curve does not claim to know exactly what tax rate is the "right" tax rate.
www.vistech.net /users/rsturge/laffercu.html   (1081 words)

  
 Wanniski.com
Robert Mundell and Arthur Laffer were the first economists on earth to realize that basic fact and to predict the bad things that followed.
As early as 1972, Art Laffer explained to me that there always are two rates of taxation that will produce the same revenue, one at a higher level of national production and one at a lower level.
There have been tens of millions of words written about the Laffer Curve since I first watched Laffer scribble it on a cocktail napkin to demonstrate the idea for Vice President Dick Cheney, when Cheney was deputy chief-of-staff to President Gerald Ford in December 1974.
www.wanniski.com /showarticle.asp?articleid=4167   (1816 words)

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