Increasing taxes decreases economic activity and decreases tax revenue

Date: Tue, 7 Oct 2014 14:10:43 -0400
From: “John R Dykers”
Subject: Laffer Curve

I left out an important influence on the Laffer Curve point at which increasing taxes decreases economic activity and decreases tax revenue OR at which decreasing taxes increases economic activity and increases revenue. That other variable is the underlying level of economic activity that exists independent of taxation. So that point on the curve changes with such things as monetary policy and fiscal policy and existential events in the world economy like ISIS and Ebola, etc. But there is a point at which taxation effects economic activity and tax revenue, rate vs revenue in either direction.

John Dykers