Arnold Kling  

Unfair Measure of the Laffer Curve

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Nick Schulz links to a post by Tino that makes the point that in spite of much lower tax rates, the U.S. government collects more tax revenue per capita than do European governments. If all else were equal, this would be a Laffer-curve story. However, it is unfair, in that to the extent that U.S. GDP per capita is higher for reasons other than tax rates, we start out with the ability to collect more taxes per capita from the same rates.

But this comment by Tino is fair.


At one point, Bartlett was on the right. But people occasionally change ideology...
Ezra Klein knows this perfectly well, and is therefore quite dishonest in classifying Bartlett as on the "right".

Seriously. If we are going to label people ideologically on the basis of where they were in 1980, then Klein should be referring to me as being on the "left."


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COMMENTS (4 to date)
Nick Schulz writes:

I didn't mean to imply it validated the Laffer Curve or not. That was just the context of the overall discussion. But it is preposterous that Europe has to have tax rates that high to get the same per capita revenue, no? The income differences can't be because of innate human capital differences, etc. It's not really a Laffer Curve story at all. Why is Europe so much less wealthy? I know of one book that helps answer that question :)

Shawn Smith writes:

So, the US collects more taxes per capita not due to lower tax rates but due to higher GDP per capita? Did you ever think the US has a higher GDP per capita due to lower tax rates? Therefore, lower tax rates leads to higher GDP per capita leading to higher tax rate collections (Laffer Curve).

Josh writes:

The piece by Tino is laughable. Bartlett clearly did not say that the top marginal rate should be 83%. He is taking Bruce out of context. He merely cites a paper in his quote. Bartlett clearly says he does not think the top marginal rate should be above 50%. Tino needs to apologize. Reading is fundamental.

Dan Weber writes:

I'm not sure that "attacking the right" means you "are on the left."

I was going to look up what Bartlett said, but he responded on his blog, so I'll just http://www.capitalgainsandgames.com/blog/bruce-bartlett/1899/am-i-right-or-left.

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