Laffer Curve

[Tintrlvr]

OC: Overhyped curve.

It's real, but we're nowhere near the part of the curve where one can increase government revenues by cutting taxes.  Not even the Reagan-era cuts did that.  Arguably, the Kennedy-era cuts may have done that, but at this point it's just technobabble used by so-called conservatives to provide an invalid justification for the self-serving tax cuts they want.

Basically this. I did recently have a discussion with someone who actually tried to argue that governments were revenue maximizing, so taxes had to be at the ideal level for revenue because government would always set it that way. It was a baffling demonstration. I should add that this individual is an executive at one of the larger financial institutions in this country.

[Tintrlvr]

Obviously you gain revenue from going from 99% to 98% tax rates, but our rates are nowhere near where you'd gain revenue by lower tax rates.

If we went to 7%/12%/25%/35%/45%/50%, then we would see higher revenue - partially from the cuts in the lowest tax brackets. Corporate rates could be 12%/23%/34%/45%, and it would do something similar.

I really don't think a 45% top corporate tax rate is a good idea.

Goldman Sachs and other multibillion dollar companies could afford it.

I think this is misplaced anger. Demand higher taxes on wealthy shareholders and CEOs, not on the corporations themselves.

Anyway, the Laffer Curve is a triviality but also more or less useless for any purpose. The individual income tax Laffer point is probably somewhere in the 70-80% or so range - certainly much, much higher than almost anyone proposes raising the top marginal rate. Corporate tax has its own problems and IMO the Laffer point for corporate tax is probably at 0% but there's an emotional attachment to corporate tax also that is hard to shake (see above).