Support the Laffer Curve, Raise Taxes

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The Laffer Curve depicts the relationship between tax rates and government revenue, with the idea being that lower tax rates can lead to increased government revenue. The bastardized version of this idea, to which all Republicans seem to agree, is that tax rates should always be lowered, and a government that collects no taxes will have much more revenue than a government that collects even 1% of GDP. I’ve argued this point before, and Dylan Matthews, writing on Ezra Klein‘s blog, has decided to conduct a little more research. His findings, which support raising taxes, are below the fold.

Matthews asked tax experts, liberal academics, conservative academics, and politicians, “Where does the Laffer Curve bend?” The subtle answer, which a few responders give, is that it’s the growth maximizing tax rate (a larger economy with a lower rate will produce more than a smaller economy with a higher rate ((this reasoning of course being identical to that of Republicans’)). The academics answer that it should be at least 60%; the liberals support similarly high numbers, and the conservative academics suggest rates from 16%-45%. What is shocking and not at all surprising is that no Republican politician responded to the question. Conveniently busy I suppose, though I doubt most Democrats would respond much better.