On the Use and Misuse of the Laffer Curve

Journal of Public Finance and Public Choice, Vol. 24, No. 3, 2005

14 Pages Posted: 23 May 2011

See all articles by Walter E. Block

Walter E. Block

Loyola University New Orleans - Joseph A. Butt, S.J. College of Business

William Barnett

Loyola University New Orleans

Date Written: May 17, 2011

Abstract

The main use to which the economics profession has put the Laffer curve (at least if you judge by a representative sample of principles and intermediate textbooks) is to choose that tax rate which maximizes governmental revenues. To say the least, this enterprise cannot be justified by a resort to positive economics. Necessarily associated to a Laffer curve, is an income curve over the same (tax rate) domain, which we illustrate and that starkly demonstrates, the conflict between the government and the citizenry over optimal tax policy. As an empirical issue, our paper casts doubt on the claim that tax rate reductions in the 1980s were responsible for budget deficits.

Suggested Citation

Block, Walter E. and Barnett, William, On the Use and Misuse of the Laffer Curve (May 17, 2011). Journal of Public Finance and Public Choice, Vol. 24, No. 3, 2005. Available at SSRN: https://ssrn.com/abstract=1845164

Walter E. Block (Contact Author)

Loyola University New Orleans - Joseph A. Butt, S.J. College of Business ( email )

6363 St. Charles Avenue
Box 15, Miller 321
New Orleans, LA 70118
United States
(504) 864-7944 (Phone)
(504) 864-7970 (Fax)

William Barnett

Loyola University New Orleans ( email )

526 Pine Street
New Orleans, LA 70118
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
91
Abstract Views
525
rank
280,146
PlumX Metrics