Josh Claybourn takes up the relationship between tax revenue and tax rates, echoing some thoughts I had back in December, when I asked about the "pefect" tax rate which would maximize revenue (see the Laffer Curve at Josh's post). In response to my post, Mark Byron had some great comments:
- Is maximizing tax revenue the goal? I don't think so, for their are likely points on the left slope of the Laffer Curve (Y axis=Tax revenue, X Axis=tax rate) that would generate less tax revenue but a greater commonweal.
I've been playing with the idea of a Son of Laffer Curve, (humbly called the Byron Curve), with overall national utility on the Y axis and the tax rate (and the resultant level of government) on the X axis. I think that the curve would max out somewhere well to the left of the Laffer Curve's peak.