Source: The Economic Illusion (1984), Chapter 5, Taxes, p. 208
Context: The total impact of the Reagan tax cuts on capital lowered the effective cost of capital to American industry by an estimated 1.2 percent. Unfortunately, the Laffer curve did not work as advertised. Lower tax rates did not produce more tax revenues. They produced deficits.
“Taken to its logical extreme, the Laffer curve makes no sense because, if you lower your taxes to zero, how are you going to get higher revenues?”
Source: My Years As Prime Minister (2007), Chapter Two, The Virtuous Circle, p. 75
Context: I never bought into the Laffer curve, a theory, named after an American supply-side economist who had been an adviser to the Reagan administration, that essentially argues that a government will increase its revenue by reducing its taxes. If it were that easy, everybody would do it. What politician doesn't want to reduce taxes in order to win votes? Taken to its logical extreme, the Laffer curve makes no sense because, if you lower your taxes to zero, how are you going to get higher revenues? In practice, every government that toyed with this theory ended up with larger deficits, higher interest rates and greater social inequality.
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Jean Chrétien 34
20th Prime Minister of Canada 1934Related quotes
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“You are the one who should quit! Because of drink and old age you have taken leave of your senses.”
Amin on Nur Muhammad Taraki, as quoted in Nabi Misdaq (2006) Afghanistan: Political Frailty and External Interference, page 125
Source: A Higher Standard (2015), p. 191
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Source: Invincible