• aesthelete@lemmy.world
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    13 hours ago

    The laffer curve absolutely does have to do with trickle down. Itā€™s the pseudoscience backing for lowering the top tax rates. It starts off with the lie that thatā€™ll actually result in an increase of revenue, even when thatā€™s laughably untrue ā€“ which is evidenced by the fact that the government has never been as broke as when it has continued to pursue this disastrous form of tax policy.

    The thing about the Laffer curve is thatā€¦yes obviously you cannot tax 100% of everyoneā€™s paycheck and expect that the economy will grow, and yes obviously taxing everyone 0% will result in 0 revenueā€¦these obvious things are obvious. But the rates in between have fairly straightforwardly predictable effects on revenue, and even adding a tax bracket where you take 100% of the income above a certain level is not one of the ends of the laffer curve, because the effective tax rate for those earners is still not 100%ā€¦because tax brackets exist.

    One implication of the Laffer curve is that increasing tax rates beyond a certain point is counter-productive for raising further tax revenue. Particularly in the United States, conservatives have used the Laffer curve to argue that lower taxes may increase tax revenue.

    https://en.wikipedia.org/wiki/Laffer_curve