Mitchell: JCT is Behind the Laffer Curve

by on March 19, 2008 · 2 comments

Here is the third and (blessedly) final installment of Dan Mitchell’s Laffer Curve videos. (Here’s the first and here’s the second.)

This one is really exciting – hey, it’s all relative – because he takes the Joint Committee on Taxation to task about how they score changes in tax rates.

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Jim Harper

Jim Harper / Jim is the Director of Information Policy Studies at The Cato Institute, the Editor of Web-based privacy think-tank Privacilla.org, and the Webmaster of WashingtonWatch.com. Prior to becoming a policy analyst, Jim served as counsel to committees in both the House and Senate.

  • http://www2.blogger.com/profile/14380731108416527657 Steve R.

    Good post. I have never been a fan of the Laffer Curve, put the videos do contain some compelling arguments and data that supports the concept.

    When discussing the concept of taxation, I find two issues that are conveniently “overlooked”.

    Fist, tax monies do not just disappear into a black hole, they are used to fund projects which promote economic growth such as roads. Also the employees of government buy goods and services thereby contributing to the economy.

    Second, the low-tax argument is that the producers need low taxes as an incentive to “create” products goods and services. While a compelling argument it is flawed. What this position does not consider is that the “buyer” now has to pay the tax which decreases buying opportunities. The tax has to be paid, the question becomes – should the producer or the consumer pay the tax? I advocate that the producer should pay the tax since it is part of the product cost anyway. Also from the free market perspective, the consumer should be free to seek out the product without a tax “burden”.

  • http://www2.blogger.com/profile/14380731108416527657 Steve R.

    Good post. I have never been a fan of the Laffer Curve, put the videos do contain some compelling arguments and data that supports the concept.

    When discussing the concept of taxation, I find two issues that are conveniently “overlooked”.

    Fist, tax monies do not just disappear into a black hole, they are used to fund projects which promote economic growth such as roads. Also the employees of government buy goods and services thereby contributing to the economy.

    Second, the low-tax argument is that the producers need low taxes as an incentive to “create” products goods and services. While a compelling argument it is flawed. What this position does not consider is that the “buyer” now has to pay the tax which decreases buying opportunities. The tax has to be paid, the question becomes – should the producer or the consumer pay the tax? I advocate that the producer should pay the tax since it is part of the product cost anyway. Also from the free market perspective, the consumer should be free to seek out the product without a tax “burden”.

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