From Bloomberg Businessweek Haley Griffin writes The Napkin Doodle That Launched the Supply-Side Revolution [1]
How would you classify the Laffer Curve today?
Laffer: It’s the same as always. It works. It’s not Republican, it’s not Democratic, it’s not conservative, it’s not liberal, it’s not left-wing, it’s not right-wing. It’s economics. People respond to incentives, and if you make something more attractive, they will do more of it. If you make something less attractive, they will do less of it. If you tax rich people and give the money to poor people, you are going to get lots and lots of poor people and no rich people. The dream in our country has always been to make the poor rich, not to make the rich poor.
tips to Calafia Beach Pundit [2]
HKO
Laffer simply applied basic principles of economics to tax policy. Supply side economics is just simply ‘economics’. Supply and demand are just twin sides of the same coin. My supply is the source of my demand.
Yet this simple principle has been lost in terrible government policy where complexity is designed to obfuscate reality (Gruber [3]), and mechanisms are created to hide true costs often from the proponents themselves. The economic choice remains; it i snot extinguished when usurped by the government. Rather than to face the reality of tax policy the Laffer Curve has been demonized as trickle down economics and voodoo economics, by those who poorly understand it. Many from the right distort it by claiming all tax cuts pay for themselves- also not true.
It is easier to demonize the truth than to accepts its consequences.