The Laffer Curve vindicated…in Canada

[Glacier]

n September 14, 1974, economist Arthur Laffer and three friends had the most productive cocktail discussion in U.S. history. On that day, Laffer famously sketched his U-shaped theory of taxation on a cocktail napkin. It came at the height of the Keynesian ascendancy, just three years after President Richard Nixon proclaimed, “I am now a Keynesian in economics” and as his successor proposed a tax increase.

Laffer argued that higher tax rates produce higher tax revenues, but only up to a point. After taxes reach a certain level, they actually reduce the amount of money the government collects, because people respond to the disincentive by reducing work and investment. Once returns become low enough, people decide they aren’t worth the extra effort.

https://blog.acton.org/archives/109699- ... anada.html

[Gilchy]

Be interesting to see how much of the lower tax revenue is attributable to the slowdown in Alberta.

[spooker]

Laffer's curve has always been too simplistic to be real ... and I think we know that anything based on human behaviour is questionable since it depends on too many soft factors