Re: Absolute DREAMING
"I believe in the laffer curve"
Firstly, the Laffer curve is simply a way to maximise government tax income, it very simply says that as you increase tax %age from 0% or reduce it from 100%, government tax revenue will increase until there's a maximum somewhere in the middle. It has nothing to say about social equality or inequality, or the optimal outcomes thereof. True to Goodhardt's law (measurements become targets), governments have followed the idea of increasing GDP per capita simply because it's easier to measure than how happy their citizens are. 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.
Secondly, it very notably is an observation, not a formula. So there is no known way to calculate where the peak is, and indeed that would depend on dozens of other societal factors. If you listen to supply-side economic theories, even with current extremely low tax rates we are on the 'right' side of the curve and reducing rates will increase tax take, but there's absolutely nothing to support that view. Indeed, Trump's tax cuts given to the richest Americans didn't increase government tax take overall, they just increased the deficit. Which clearly shows that the Laffer curve 'sweet spot' for current US conditions is at a higher tax %age. For UK / EU conditions
Finally, a simple thought experiment - the idea of trickle-down economics is that if the rich are richer they will spend more and there will be more for everyone. But half a seconds critical analysis would point out that a dollar spent by a rich person is no different to a dollar spent by a poor person. Also, poor people, exactly becuase they are poor, do not spend as much as they would like to, but would spend more if they were slightly richer. 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. In other words, given the same total economic base, there is a higher increase in the economy if the poor have more money. 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).
The 'rising tide lifts all boats' metaphor only works if the poor (small, but far more numerous) take the metaphorical part of the sea, and the rich (fewer and economically 'larger') are the boats. And yet the metaphor is mostly used the opposite way!