Or am I just drunk? It seems to make sense. (pdf warning)
The top tax rate should be 0%.
Of course, what he means is that there should be no income tax on income over some amount (he uses Pounds, he’s British and they don’t seem to call their money “dollars”, weird.)
RTWT
Via Samizdata who makes with the unintentional funny. In discussing FrnakJ he writes:
Good recent Frank Jism:
Heh. He said “jism”.
The problem I have with this idea is the same one that I have with people who advocate big cuts to current tax rates on the grounds that revenues will increase because more people will suddenly be working harder and making more money. (Note: This is different from the idea advanced by Laffer that cutting rates increases revenues because more money will be re-invested in the economy creating more wealth)
I have never seen any evidence that people purposefully curtail their income in order to avoid taxes. What I have seen is people who will shift their income from things like ordinary income to stock options or other instruments that are taxed more favorably to avoid taxes and that persists despite the tax rates. Just look at Warren Buffet and how he moves his money around to avoid taxes while lecturing us on the idea that we should be paying more taxes.
That isn’t to say that I support higher taxes or more taxes, just that I find these particular arguments unconvincing.
This actually happened with my parents some years ago. Mom started a small accounting buisiness and within a couple years she had all the clients she wanted and was busy full-time. The money that she brought in combined with my Dad’s salary put them into the next tax bracket. That new tax rate not only wiped out all the profit she’d made but cost them more besides. She closed the buisiness and stopped working.
To add to what Mitchell said, isn’t it true that cutting taxes increases revenues? Bush’ tax cuts increased gov’t receipts, for instance.