State Budgets: Day of Reckoning

[SK in CV]

[quote=Hobie]
It is really human nature and Laffer did a great job illustrating it. If the politicians can keep their hands off the checkbook under a lower tax rate, revenues will increase.[/quote]

Laffer did do great job of illustrating it. But what he didn’t do, nor did any of the tax policies based on his theory, is prove that his theory has any validity. Pretty pictures don’t validate a theory. His theories have never been supported by any empirical evidence. There is no evidence that the economy reacts as he theorized. It is no more than a failed theory. Glad you like the pretty pictures though. Kinda like air-brushing a photograph of Ernest Borgnine to look like Cindy Crawford. Ernie still isn’t a pretty woman.

[surveyor]

[quote=pri_dk]
Price/volume relationships have nothing do with taxes. People don’t “buy” more taxes when the price goes down.[/quote]

Hobie’s point is that a business gets more customers when it lowers its prices. Through volume, the business is better able to increase its revenues even though its price is low. There are more people available to purchase at a low price point vs. a high price point.

A similar thing happens when taxes are low. If taxes are low, there is less incentive to avoid paying taxes, thereby opening up more people to be susceptible to taxes.

Case in point: John Kerry preferred to keep his yacht in Rhode Island (low taxes), as opposed to Massachussets (higher taxes). Even though he was rich, he still wanted to avoid paying such an onerous tax.

[surveyor]

[quote=pri_dk]
Price/volume relationships have nothing do with taxes. People don’t “buy” more taxes when the price goes down.[/quote]

Hobie’s point is that a business gets more customers when it lowers its prices. Through volume, the business is better able to increase its revenues even though its price is low. There are more people available to purchase at a low price point vs. a high price point.

A similar thing happens when taxes are low. If taxes are low, there is less incentive to avoid paying taxes, thereby opening up more people to be susceptible to taxes.

Case in point: John Kerry preferred to keep his yacht in Rhode Island (low taxes), as opposed to Massachussets (higher taxes). Even though he was rich, he still wanted to avoid paying such an onerous tax.

[surveyor]

[quote=pri_dk]
Price/volume relationships have nothing do with taxes. People don’t “buy” more taxes when the price goes down.[/quote]

Hobie’s point is that a business gets more customers when it lowers its prices. Through volume, the business is better able to increase its revenues even though its price is low. There are more people available to purchase at a low price point vs. a high price point.

A similar thing happens when taxes are low. If taxes are low, there is less incentive to avoid paying taxes, thereby opening up more people to be susceptible to taxes.

Case in point: John Kerry preferred to keep his yacht in Rhode Island (low taxes), as opposed to Massachussets (higher taxes). Even though he was rich, he still wanted to avoid paying such an onerous tax.

[surveyor]

[quote=pri_dk]
Price/volume relationships have nothing do with taxes. People don’t “buy” more taxes when the price goes down.[/quote]

Hobie’s point is that a business gets more customers when it lowers its prices. Through volume, the business is better able to increase its revenues even though its price is low. There are more people available to purchase at a low price point vs. a high price point.

A similar thing happens when taxes are low. If taxes are low, there is less incentive to avoid paying taxes, thereby opening up more people to be susceptible to taxes.

Case in point: John Kerry preferred to keep his yacht in Rhode Island (low taxes), as opposed to Massachussets (higher taxes). Even though he was rich, he still wanted to avoid paying such an onerous tax.

[surveyor]

[quote=pri_dk]
Price/volume relationships have nothing do with taxes. People don’t “buy” more taxes when the price goes down.[/quote]

Hobie’s point is that a business gets more customers when it lowers its prices. Through volume, the business is better able to increase its revenues even though its price is low. There are more people available to purchase at a low price point vs. a high price point.

A similar thing happens when taxes are low. If taxes are low, there is less incentive to avoid paying taxes, thereby opening up more people to be susceptible to taxes.

Case in point: John Kerry preferred to keep his yacht in Rhode Island (low taxes), as opposed to Massachussets (higher taxes). Even though he was rich, he still wanted to avoid paying such an onerous tax.

[Hobie]

[quote=SK in CV] It is no more than a failed theory. [/quote]

Sorry I lost you on the concept. So many in government tend to rule out ideas before they take the time to understand them. It really comes down to politics and power rather than directly solving a problem.

Have a good holiday!

[Hobie]

[quote=SK in CV] It is no more than a failed theory. [/quote]

Sorry I lost you on the concept. So many in government tend to rule out ideas before they take the time to understand them. It really comes down to politics and power rather than directly solving a problem.

Have a good holiday!

[Hobie]

[quote=SK in CV] It is no more than a failed theory. [/quote]

Sorry I lost you on the concept. So many in government tend to rule out ideas before they take the time to understand them. It really comes down to politics and power rather than directly solving a problem.

Have a good holiday!

[Hobie]

[quote=SK in CV] It is no more than a failed theory. [/quote]

Sorry I lost you on the concept. So many in government tend to rule out ideas before they take the time to understand them. It really comes down to politics and power rather than directly solving a problem.

Have a good holiday!

[Hobie]

[quote=SK in CV] It is no more than a failed theory. [/quote]

Sorry I lost you on the concept. So many in government tend to rule out ideas before they take the time to understand them. It really comes down to politics and power rather than directly solving a problem.

Have a good holiday!

[SK in CV]

[quote=Hobie][quote=SK in CV] It is no more than a failed theory. [/quote]

Sorry I lost you on the concept. So many in government tend to rule out ideas before they take the time to understand them. It really comes down to politics and power rather than directly solving a problem.

Have a good holiday![/quote]

Of course you lost me on the concept. That’s what idealogues do. Ideas they don’t like, they dismiss as irrelevant. They dismiss actual facts in favor of politics. When Laffer first proposed his theory, I questioned its validity. As a trained economist, that’s the proper thing to do with an unproven, untested theory. I didn’t dismiss it. Reagan’s tax reform included so many other good things, many of which have survived and proven to be good, it was worth a try. It failed. And then failed again.

And good holidays to you.

[SK in CV]

[quote=Hobie][quote=SK in CV] It is no more than a failed theory. [/quote]

Sorry I lost you on the concept. So many in government tend to rule out ideas before they take the time to understand them. It really comes down to politics and power rather than directly solving a problem.

Have a good holiday![/quote]

Of course you lost me on the concept. That’s what idealogues do. Ideas they don’t like, they dismiss as irrelevant. They dismiss actual facts in favor of politics. When Laffer first proposed his theory, I questioned its validity. As a trained economist, that’s the proper thing to do with an unproven, untested theory. I didn’t dismiss it. Reagan’s tax reform included so many other good things, many of which have survived and proven to be good, it was worth a try. It failed. And then failed again.

And good holidays to you.

[SK in CV]

[quote=Hobie][quote=SK in CV] It is no more than a failed theory. [/quote]

Sorry I lost you on the concept. So many in government tend to rule out ideas before they take the time to understand them. It really comes down to politics and power rather than directly solving a problem.

Have a good holiday![/quote]

Of course you lost me on the concept. That’s what idealogues do. Ideas they don’t like, they dismiss as irrelevant. They dismiss actual facts in favor of politics. When Laffer first proposed his theory, I questioned its validity. As a trained economist, that’s the proper thing to do with an unproven, untested theory. I didn’t dismiss it. Reagan’s tax reform included so many other good things, many of which have survived and proven to be good, it was worth a try. It failed. And then failed again.

And good holidays to you.

[SK in CV]

[quote=Hobie][quote=SK in CV] It is no more than a failed theory. [/quote]

Sorry I lost you on the concept. So many in government tend to rule out ideas before they take the time to understand them. It really comes down to politics and power rather than directly solving a problem.

Have a good holiday![/quote]

Of course you lost me on the concept. That’s what idealogues do. Ideas they don’t like, they dismiss as irrelevant. They dismiss actual facts in favor of politics. When Laffer first proposed his theory, I questioned its validity. As a trained economist, that’s the proper thing to do with an unproven, untested theory. I didn’t dismiss it. Reagan’s tax reform included so many other good things, many of which have survived and proven to be good, it was worth a try. It failed. And then failed again.

And good holidays to you.

[Author]

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