Re: Absolute DREAMING
@jmch
"Firstly, the Laffer curve is simply a way to maximise government tax income"
Is this not the aim? Maximise government income to reach the limit of their spending ability (because of the cries always for more tax).
"It has nothing to say about social equality or inequality"
That is true. It is not about dragging people down to the same level and punishing success due to greed. There are of course people who argue for this because they are greedy buggers but thats why I ask when they should be 'taxed' in the name of global equality.
"But the job of governments isn't to increase a country's economy above any and every other priority, hence tax at a non-maximal point of the Laffer curve might be a more desirable outcome."
Maybe. But since the economy is basically the provider of our living standards it is certainly part of our needs and wants we shouldnt be aiming to go above that point, so staying under the curve makes sense.
"So there is no known way to calculate where the peak is, and indeed that would depend on dozens of other societal factors"
Very much agreed.
"Indeed, Trump's tax cuts given to the richest Americans didn't increase government tax take overall, they just increased the deficit."
Interestingly Trump also benefited from the lowest unemployment and a very good economy up to covid. The deficit increase being planned by the Dems too but Obama was also trying to convince people to put up with the 'new normal' of poor economic performance, until it went well then claimed it as his victory.
"Rich people on the other hand, already save or invest a good portion of their income, so a marginal increase in their income will not change their spending habits much."
Big problem there, where does the money go? Invest is to put the money into the economy to be borrowed and spent. To save by say depositing in a bank leads to the bank lending it out.
"In other words, given the same total economic base, there is a higher increase in the economy if the poor have more money"
There is a trick to this. If you give people a lump they pay off their debts or save it. If you slightly increase their take home pay they spend it.
"This in turn means they have more to spend on whatever rich people sell (Henry Ford's wisdom that if his workers earned enough they could buy his cars)."
That isnt wisdom that is stupidity. Paying his workers more to buy his cars is a massive loss making exercise. You cannot make money that way. That is why the public workers paying tax does not actually make a country money, they have to spend on other things. Henry Fords wisdom was to reduce the churn of workers.
"The 'rising tide lifts all boats' metaphor"
If all are getting richer even if some are getting richer faster is all boats rising. And it is the case.
Biting the hand that feeds IT
