The Laffer Curve: The Mean Green Liberal View

Mean green liberal thinking is characterized by the rejection of complexity and a "snap shot" view of the world. By "snap shot" I mean they take a static view of systems instead of seeing one part of a system effects another and actually changes the behavior of the system over time.

 

Additionally, the mean green view external forces acting on people as the keys to everything and see often see peoples' internal motivations as unaffected by external forces. Given all this, let's think about the mean green view of tax rate hikes:

 

 

 

It's pretty simple (starting at the top):

 

Rising deficits lead to increased pressure to raise tax rates

 

Tax rates rise increasing the amount of tax collected

 

The increased tax collections reduce the deficit

 

Note that the economy is treated as exogenous, i.e. the size of the tax-able economy is not affected in any way by tax rates.

 

This diagram, and how it relates to the Laffer Curve is further explained in the NeoLibertarian At Large blog posting The Systems Thinking View of The Laffer Curve. There is also more information about the Laffer Curve itself, including a quick video explaining the Laffer Curve, in The Laffer Curve: Tax Cuts Pay for Themselves . . . Sometimes.

 

Done