this post was submitted on 15 Apr 2025
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[–] Rivalarrival@lemmy.today 4 points 4 months ago* (last edited 4 months ago) (1 children)

The Laffer Curve does show that there is a point at which tax rates rise so high that tax revenues begin to fall (and where reducing the tax rate would therefore increase tax revenues).

Marginal tax rates above this point compel taxpayers to increase deductible expenses: They spend more. They buy more goods; they spend more on labor, because the options at this point are either "spend, and claim it as a business expense" or "give it to the IRS". Naturally, everyone chooses the former.

The 91% top-tier tax rates we had for most of the 20th century did not stifle business. They promoted it.

Tax the middle class