Labour Plans to Cut Taxes Paid by Rich

CLAPTON

Generali wrote: »

Utter twaddle of the highest order. The Laffer curve probably has more empirical evidence to back it up of any economic theory except Marshall's.

http://www.sciencedirect.com/science/article/pii/S105353579690013X

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2235697



http://www.sciencedirect.com/science/article/pii/S030439321100064X

http://www.jstor.org/discover/10.2307/2534678?sid=21105900696923&uid=2&uid=3737536&uid=4

http://books.google.com.au/books?hl=en&lr=&id=bJNPBYCBZj4C&oi=fnd&pg=PA177&dq=laffer+curve+empirical+evidence&ots=MuCxM9zuMm&sig=K-s8aS0EMOQm2jTp6QA_XhBZL6A#v=onepage&q&f=false

There is masses and masses of empirical evidence for the Laffer Curve. The reason? Tax data are freely and widely available and the idea is a simple and compelling one which is of importance to policy makers.

I'm not sure why you'd possibly think anything else would be the case. You may be a better economist than me (in your own mind anyway) but you don't seem to have much of a clue about what drives the behaviour of economists.

Perhaps you can stop patronising me and start being right.

it's certainly interesting to realise that changes to e.g. capital gains taxes has no impact on the sums collected from income taxes.
I say that because if that were so it would change values of the Laffer curve which we know doesn't change.


I know little about economic but I know enough maths to know the difference between correlations and causally based equations.

Generali

CLAPTON wrote: »

it's certainly interesting to realise that changes to e.g. capital gains taxes has no impact on the sums collected from income taxes.
I say that because if that were so it would change values of the Laffer curve which we know doesn't change.


I know little about economic but I know enough maths to know the difference between correlations and causally based equations.

Having looked through the abstracts it also seems that VAT and equivalents have been shown empirically not to have much of a Laffer Curve effect so presumably that's why increases in VAT were popular across the world in the 80s and 90s when Laffer was at his height in popularity.

CLAPTON

Generali wrote: »

Having looked through the abstracts it also seems that VAT and equivalents have been shown empirically not to have much of a Laffer Curve effect so presumably that's why increases in VAT were popular across the world in the 80s and 90s when Laffer was at his height in popularity.

that's an interesting observation about VAT.

maybe people don't really consider VAT as such but simply look at it as part of the price: so it might affect some-one choosing which country to live in (high versa lower overall cost of living) but once there wouldn't affect their income generation behaviour.

Generali

CLAPTON wrote: »

that's an interesting observation about VAT.

maybe people don't really consider VAT as such but simply look at it as part of the price: so it might affect some-one choosing which country to live in (high versa lower overall cost of living) but once there wouldn't affect their income generation behaviour.

It's hard to avoid too apart from by doing something really unpleasant like not buying stuff.

Yes, you can pay your window cleaner in cash but you're going to pay VAT on anything that comes through a modern supply chain.

I'm sure that there is a substitution effect whereby VAT not being charged on food means people buy more fois gras and truffles and less Champagne and cigars. That will make a Laffer curve of a sort. Also, the philosophical theory on the famous napkin was that at 0% and 100% income tax rates you bring in nil tax: the remaining argument is what you collect in between those rates. There isn't really an equivalent rate of VAT. A 100% VAT rate just doubles the cost of something, it doesn't prevent me from buying it: tax rates on petrol and cigarettes are well above 100% I believe and people still buy them.

StevieJ

Generali wrote: »

It's hard to avoid too apart from by doing something really unpleasant like not buying stuff.

Yes, you can pay your window cleaner in cash but you're going to pay VAT on anything that comes through a modern supply chain.

I'm sure that there is a substitution effect whereby VAT not being charged on food means people buy more fois gras and truffles and less Champagne and cigars. That will make a Laffer curve of a sort. Also, the philosophical theory on the famous napkin was that at 0% and 100% income tax rates you bring in nil tax: the remaining argument is what you collect in between those rates. There isn't really an equivalent rate of VAT. A 100% VAT rate just doubles the cost of something, it doesn't prevent me from buying it: tax rates on petrol and cigarettes are well above 100% I believe and people still buy them.

Maybe from Calais? There are many people who finance a holiday (say in Greece) by bringing back cigarettes.