{"id":2560,"date":"2008-02-02T18:10:47","date_gmt":"2008-02-03T01:10:47","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=2560"},"modified":"2008-02-02T18:10:47","modified_gmt":"2008-02-03T01:10:47","slug":"understanding-the-laffer-curve-reality-myth-whats-next","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/2560\/understanding-the-laffer-curve-reality-myth-whats-next\/","title":{"rendered":"Understanding the Laffer Curve — Reality & Myth — What’s Next?"},"content":{"rendered":"

Being just slightly<\/em> to the right of Attila the Hun, taxes are of great import to me. I believe in principles long established. One of them is small government works better for its citizens than large government. Lower taxes are better than higher taxes as long as the bills are being paid, our military is strong enough to deter aggressors, and basic constitutional government functions are adequately funded.<\/p>\n

One of the breakthrough economic theories to be proven in the red hot fire of real life application has been the Laffer Curve<\/strong>. Arthur Laffer’s theory was adopted as fundamental to economic recovery by Ronald Reagan during his 1980 presidential campaign. <\/p>\n

I’ll let the video below speak for itself, but will allow myself a few pithy observations. <\/p>\n

<\/object><\/p>\n

The first time the Laffer Curve Theory was applied tax revenues skyrocketed<\/em>. The U.S. Treasury’s<\/em> own records show revenues generated from the early 1980’s tax cuts went up an aggregate 95%. The period measured was the time Reagan took office until he left office — just short of double<\/em> in eight years. I expect this will be shown in Parts II and III<\/em> when they’re released.<\/p>\n

Actually, the first time the theory was applied was before anyone, including Laffer himself had even thought of the Laffer Curve. It was John Kennedy<\/em> who cut the top marginal rate from (I’m not making this up.) about 90.5% (!) down<\/strong> to a paltry 70%. The reason Kennedy used was that it would spur the economy, and increase the actual tax dollars collected. Go figure. History shows he was dead on right. That top rate remained until Reagan cut it to 28% over two decades later.<\/p>\n

Opinion<\/em> — If we ever get income taxes, capital gains taxes, and corporate taxes where they belong, and combine them with cuts (elimination?) in the fat of government spending — we’ll see an economic surge that will make the Reagan boom look like a blip on the screen. But alas, I daydream. Cockroaches as a species will die before pork barrel spending does<\/em>. <\/p>\n

Opinion<\/em> — Together with the significant liquidity increases in both the U.S. and European Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Being just slightly to the right of Attila the Hun, taxes are of great import to me. I believe in principles long established. One of them is small government works better for its citizens than large government. Lower taxes are better than higher taxes as long as the bills are being paid, our military is […]<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-2560","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-real-estate","8":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":5244,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/5244\/arthur-laffer-the-age-of-prosperity-is-over\/","url_meta":{"origin":2560,"position":0},"title":"Arthur Laffer: “The Age of Prosperity Is Over”","author":"Greg Swann","date":"October 27, 2008","format":false,"excerpt":"The author of the Laffer Curve in the Wall Street Journal:When markets are free, asset values are supposed to go up and down, and competition opens up opportunities for profits and losses. Profits and stock appreciation are not rights, but rewards for insight mixed with a willingness to take risk.\u2026","rel":"","context":"In "Investment"","block_context":{"text":"Investment","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/investment\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":10558,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/10558\/manufacturing-inflation-how-art-laffer-got-it-wrong\/","url_meta":{"origin":2560,"position":1},"title":"Manufacturing Inflation (How Art Laffer Got It Wrong)","author":"Brian Brady","date":"December 15, 2009","format":false,"excerpt":"If you've wondered where that inflation was, you might start seeing signs of it today.\u00a0 Economic data released today are a great example of why inflation is a monetary consequence and not an economic one: New York metro manufacturing activity slowed WAY less than expected: Factories in the New York\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":17932,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/17932\/overnight-news-which-slaves-are-wisest-to-rebel\/","url_meta":{"origin":2560,"position":2},"title":"Overnight News: Which slaves are wisest to\u00a0rebel?","author":"Greg Swann","date":"March 5, 2021","format":false,"excerpt":"I gave this observation to Odysseus a few weeks ago \u2013 opining about the world as an opinionated dog might do: \u201cTo be owned as a pet is to be loved. To be owned as an investment is to be prized. But to be owned as a nuisance is to\u2026","rel":"","context":"In "Group Therapy"","block_context":{"text":"Group Therapy","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/group-therapy\/"},"img":{"alt_text":"Ya think it's easy?","src":"https:\/\/i0.wp.com\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-content\/uploads\/2020\/08\/BHBNewTopImage-300x225.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":10453,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/10453\/the-social-media-curve\/","url_meta":{"origin":2560,"position":3},"title":"The Social Media curve","author":"Eric Blackwell","date":"November 30, 2009","format":false,"excerpt":"if Arthur Laffer can have a curve for taxes that defies the static revenue generation models in use at the time and since, then I can have one for social media. (Hat tip to my friend Scott Hack at Selling Greater Louisville for starting me down this road...) The true\u2026","rel":"","context":"In "Disintermediation"","block_context":{"text":"Disintermediation","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/disintermediation\/"},"img":{"alt_text":"socialmediainbusiness","src":"https:\/\/i0.wp.com\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-content\/uploads\/2009\/11\/socialmediainbusiness.gif?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":5564,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/5564\/think-your-taxes-are-going-down-think-again\/","url_meta":{"origin":2560,"position":4},"title":"Think Your Taxes Are Going Down? Think Again","author":"Doug Quance","date":"November 13, 2008","format":false,"excerpt":"In A Few Years We'll Be Calling These Days The Good Ol' Days Some believe that in the coming administration, their taxes will be lowered. Some even believe that they won't have to worry about buying gas... or paying their mortgage... as Obama will make sure that all is well.\u2026","rel":"","context":"In "General"","block_context":{"text":"General","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/general\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":7888,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/7888\/americans-today-are-taxed-at-levels-most-of-our-forebears-would-have-considered-unthinkable-by-our-own-nations-historical-standards-we-are-outrageously-insanely-overtaxed-and-yet-we-shrug-our\/","url_meta":{"origin":2560,"position":5},"title":"“Americans today are taxed at levels most of our forebears would have considered unthinkable. By our own nation’s historical standards, we are outrageously, insanely overtaxed. 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