The Laffer Curve is a joke

[Taco John]

Dont mind me...

I just wanted to bring up the fact that this thing is useless:

http://www.polyconomics.com/searchbase/Laffer2.gif


It's a joke. Nobody can ever know where on the stupid thing we are at any given time. There's no way to know. It's nothing more than a shell game. When someone brings it up in an argument, your best response is to laugh at them and ask them on which side of a rainbow the pot of gold is located, the left or the right. The pot of gold at the end of the rainbow theory has about as much useful application as the Laffer curve.


That is all...

[Cochise]

I think the equation that would give the particulars of the curve will always be argued. But I think it's undeniable that there is a point of decreasing returns, where further taxation becomes punitive rather than productive.

[patteeu]

:LOL:

Don't you think that the study of economics, in general, suffers from the same problem?

At least we can rest assured that 9/11 was an inside job!

[CRONUS]

I think the actual depiction is a joke, in that it oversimplifies a very complex issue. Is there a point at which productivity is reduced by the disincentive of taxes, certainly. But the European countries with balanced budgets prove that you can have revenue that equals expenditures based on taxes, it just reduces productivity.

[patteeu]

...But the European countries with balanced budgets prove that you can have revenue that equals expenditures based on taxes, it just reduces productivity.

Huh? What does this have to do with the Laffer Curve?

['Hamas' Jenkins]

I think that any economic plan drafted on a napkin is a goddamned joke.

[patteeu]

The supply and demand curves are jokes! LMAO

http://www.sci.wsu.edu/math/Lessons/SupplyAndDemand/supply0.gif

It's a goddamned shell game on a napkin, I tell you.

[BucEyedPea]

"The Laugher Curve" is what I call it. Tee Hee! ROFL

But the napkin thing doesn't matter much to me. Heck, I do my best work on restaurant napkins. Never know when a bright idea will pop into one's head. Many are even accidents....like penicillin.

['Hamas' Jenkins]

The supply and demand curves are jokes! LMAO


It's a goddamned shell game on a napkin, I tell you.

I can't imagine the cardiovascular shape you must be in running around trying to defend every flawed tenet of Republican policy. Oh well, at least it doesn't damage your credibility as an independent thinker...

[CRONUS]

Huh? What does this have to do with the Laffer Curve?It is the economic theory that based on Laffer's curve diminishing tax revenues will negate increased taxes to the point you won't achieve the desired result. Milton theorized that increased productivity would offset lowered taxes to achieve the same goal. That has turned out to be as false as any Keynsian theoretical foundations.

[Taco John]

Don't you think that the study of economics, in general, suffers from the same problem?



It's good to see you're still a champion of deflection.

No, I don't think that at all. There is a lot of concrete economics available. The Laffer curve isn't one of them. As a theory, sure, it's quaint, but ultimately useless. Dangerous even, especially if you guess wrong.


You want to know why the Laffer curve is such a joke? Because it takes professed conservatives like yourself and turns them into shills for a maximization of government revenues argument. The Laffer curve is the joke, but *you* are the punchline. Imagine: A conservative so distracted with the idea of maximizing the taxable return for the government that he forgets that he should be making a case for cutting government spending.

[patteeu]

It's good to see you're still a champion of deflection.

No, I don't think that at all. There is a lot of concrete economics available. The Laffer curve isn't one of them. As a theory, sure, it's quaint, but ultimately useless. Dangerous even, especially if you guess wrong.


You want to know why the Laffer curve is such a joke? Because it takes professed conservatives like yourself and turns them into shills for a maximization of government revenues argument. The Laffer curve is the joke, but *you* are the punchline. Imagine: A conservative so distracted with the idea of maximizing the taxable return for the government that he forgets that he should be making a case for cutting government spending.

Ha, well then the joke is on you because I'm not that guy. I'm the guy who criticizes Republicans for arguing for tax cuts on the basis of maximizing revenues for that very reason. But I will say that the potential for increased revenue is not a good reason to argue *against* a tax cut.

There is nothing wrong with the Laffer Curve that isn't also wrong with the Supply and Demand curves. There are too many variables to draw any of them with precision, but they are all useful analytical tools.

[patteeu]

It is the economic theory that based on Laffer's curve diminishing tax revenues will negate increased taxes to the point you won't achieve the desired result. Milton theorized that increased productivity would offset lowered taxes to achieve the same goal. That has turned out to be as false as any Keynsian theoretical foundations.

I don't know what you said, but I'm confident that you don't either.

['Hamas' Jenkins]

I don't know what you said, but I'm confident that you don't either.

Regardless of the empty deflection, that was f*cking hilarious ROFL

[CRONUS]

I don't know what you said, but I'm confident that you don't either.

I guess I just got that MBA for shits and grins.:p

[Taco John]

There is nothing wrong with the Laffer Curve that isn't also wrong with the Supply and Demand curves. There are too many variables to draw any of them with precision, but they are all useful analytical tools.


I disagree. The supply and demand curves are market driven, and changes are affected at the market level by the market. The Laffer curve is a theoretical tool used by the crank yankers in government halls to rationalize cutting taxes without the need to cut spending.

Plus, the supply and demand curves are much less complex than what the Laffer curve *really* looks like. Are you familiar with Martin Gardener's Neo-Laffer curve?



From wikipedia:

The Neo-Laffer Curve

http://upload.wikimedia.org/wikipedia/en/1/1b/NeoLaffer.gif

A harsher critique of the Laffer Curve can be seen with Martin Gardner's satirical construct, the so-called neo-Laffer Curve. The neo-Laffer curve matches the original curve near the two extremes of 0% and 100%, but rapidly collapses into an incomprehensible snarl of chaos at the middle. Gardner based his curve on actual US economic data collected in a fifty year period by statistician Persi Diaconis.

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. A realistic tax curve would most certainly not resemble a smooth parabola or even any other simple function, but rather a very complex curve with many peaks, valleys, and multiple local maxima. Inside the middle, a wide range of various economic factors confound any simplistic attempt at this interpolation.

As a pedagogical tool, a Laffer curve helps illustrate a specific application of the law of diminishing returns, where the inhibitory cost of taxes may eventually outweigh the increased rate of taxation, and thus led to a counterintuitive lower realization of tax revenue. 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. It is in this context that the Laffer curve is often abused, taken as a serious model for tax revenue when it has little to no predictive value in debates between intermediary rates of taxation



The Laffer curve is a joke.



/that's all I have to day. i don't post much, but I read now and again, and have been disappointed that nobody has challenged the uselessness of the Laffer curve that keeps coming up in debates.

[patteeu]

I disagree. The supply and demand curves are market driven, and changes are affected at the market level by the market. The Laffer curve is a theoretical tool used by the crank yankers in government halls to rationalize cutting taxes without the need to cut spending.

Plus, the supply and demand curves are much less complex than what the Laffer curve *really* looks like.

That's nonsense. The real supply and demand curves are much more complex than they are normally drawn, just like the Laffer Curve. You're just ignoring that complexity (as we all do), but you're choosing not to ignore the complexity of the real relationship between tax revenues and tax rates.

Are you familiar with Martin Gardener's Neo-Laffer curve?

Yes, it's kind of funny, but it's not a real indictment of Laffer's curve.

The Laffer curve is a joke.

You're confused. Martin Gardener's Neo-Laffer curve is literally a joke. Laffer's curve is a tool that illustrates a real economic phenomenum in a simplified way (much like the supply and demand curves do).

/that's all I have to day. i don't post much, but I read now and again, and have been disappointed that nobody has challenged the uselessness of the Laffer curve that keeps coming up in debates.

I haven't seen anyone use the Laffer Curve improperly (at least by name) since you went lurker. Maybe you should challenge a specific reference where you think it's been used in a "useless" way.

[BucEyedPea]

/that's all I have to day. i don't post much, but I read now and again, and have been disappointed that nobody has challenged the uselessness of the Laffer curve that keeps coming up in debates.


No, no, no....I have. Just ask patty.

[patteeu]

No, no, no....I have. Just ask patty.

True.

When people misuse/misunderstand the Laffer Curve and try to say that lowered taxes always lead to increased revenues, they deserve criticism.

But to criticize the curve just because it's a simplification of an incredibly complex dynamic is to misuse/misunderstand it as well.

[Taco John]

I have to admit that your argument of, "oh, huh!," is quite compelling.

[bunnytrdr]

I think the equation that would give the particulars of the curve will always be argued. But I think it's undeniable that there is a point of decreasing returns, where further taxation becomes punitive rather than productive.Yes, but the converse is also true.

[bunnytrdr]

Ha, well then the joke is on you because I'm not that guy. I'm the guy who criticizes Republicans for arguing for tax cuts on the basis of maximizing revenues for that very reason. But I will say that the potential for increased revenue is not a good reason to argue *against* a tax cut.

There is nothing wrong with the Laffer Curve that isn't also wrong with the Supply and Demand curves. There are too many variables to draw any of them with precision, but they are all useful analytical tools.Wrong, that is what linear algebra is for.

[patteeu]

Wrong, that is what linear algebra is for.

No matter how many variables you model, you're still going to end up with an approximation not a perfect reflection of reality. You can't get around that with linear algebra although I'm sure you can use it for some very interesting analysis.