Thursday, January 13, 2011

Arthur Laffer and His Napkin Revisited

Very good sentences from Daniel Mitchell at the Cato at Liberty blog:

The Laffer Curve is one of my favorite issues... But it is a very frustrating topic. Half my time is spent trying to convince left-leaning people that the Laffer Curve exists. I use common-sense explanations. I cite historical examples. I even use information from left-of-center institutions in hopes that they will be more likely to listen.

The other half of my time is spent trying to educate right-leaning people that the Laffer Curve does not mean that “all tax cuts pay for themselves.” I relentlessly try to make them understand that there is a big difference between pro-growth tax cuts that increase incentives for productive behavior and therefore lead to more taxable income and other tax cuts such as child credits that have little or no impact on economic performance.

Preach it, brother.


  1. I would sure like to hear any common sense argument in favor of the Laffer Curve. It makes no sense at all.

  2. This is a great video series, also done by Dan Mitchell, that explains the Laffer Curve.