RE: Why LOWER TAXES mean more income for the government.Explaining the LAFFER CURVE.
Thanks for the Post. As I understand it the Laffer curve is provided as support for supply side, neo-liberal economics that has dominated the last 3 decades. It is not a 1+1 = 2 type of truth. 'Demand side' or Keynesian economics is an alternative evidence based story. The most famous demonstration of its potential success being the US Government responding to the Great Depression and investing in infrastructure and jobs, which kick started an economic boom. The argument for lower taxes states that "the rising tide lifts all boats", if the capitalists and so called 'wealth creators' have more money, this will trickle down to everyone else. However the current state of the Global economy, and the huge increases in in equality since supply side economics has taken root suggests otherwise. Cheers
Of course it is up for interpretetion.personally i do believe it.in any case there is no doubt in my mind that it is better than the current state
The government doesn't "invest" - it redistributes money from the private sector to areas with a naturally lower pull for those resources. Neither supply side nor demand side tweaks will ever match the efficiency you can get just letting price signals do their job.
Fair point, invest is the wrong word. Efficiency to do what though? help the majority of society, I don't think so. The countries with the highest standards of living, and lowest negative social indicators (e.g. teenage pregnancy, social support, parental leave, low unemployment) are those typified by the Social democratic model of Capitalism that dominates in Scandinavia. Taxes are higher, but the state works together with Capitalism to ensure fairer outcomes for all. Where capitalism has historically not been controlled and supported by the state it runs riot, fails and no one wins. The British and US economies were built in the 19th century by completely protectionist trade policies that the World Bank and other global lenders now ensure are not adopted by countries trying to develop in the same way.