tag:blogger.com,1999:blog-4900303239154048192.post3185398014492149803..comments2024-03-06T06:34:42.881-05:00Comments on EconoSpeak: Krugman v. Mankiw on Rubio’s Tax Cut – Show Me the ModelUnknownnoreply@blogger.comBlogger3125tag:blogger.com,1999:blog-4900303239154048192.post-19708973852712419572016-02-23T19:14:46.696-05:002016-02-23T19:14:46.696-05:00Interesting couple of comments. On Russia, the tr...Interesting couple of comments. On Russia, the transition from Yeltsin to Putin meant at least a few corporate governance rules which were absent in the 1990's. Plus the recovery of world oil prices helped.<br /><br />I can recall a small model from James Tobin that put the top of Laffer's cocktail napkin curve at an 82% tax rate. Other models differ but not my much. Even Bernie is talking at most a 52% top marginal rate.ProGrowthLiberalhttps://www.blogger.com/profile/17138489390594441753noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-13706102576262022462016-02-23T16:22:23.029-05:002016-02-23T16:22:23.029-05:00Generally pretty good discussion here, pgl. I wil...Generally pretty good discussion here, pgl. I will note one minor caveat, where Laffer was right about the 1981 tax cuts. It looks like revenue from the top 2% of the income distribution did rise after the cuts, which reduced their top marginal rate from 70% to 50%. That is indeed in the range of where the Laffer curve's hump is thought to lie, so not totally unexpected.<br /><br />For all its having been drawn on a napkin, the curve is not per se theoretically wrong. Indeed at 100% tax rates we expect revenues to get very low, if not necessarily zero (in parts of Russia in the late 90s rates actually exceeded 100% for some parties; they paid bribes to get out of paying some it, and some revenues were collected). Indeed, since I have brought up Russia, with its totally wacko tax system in the late 90s, one of the few reasonable things Putin did when he first came in during 2000 was to introduce a flat tax at 20%, which did indeed raise more revenues than the monstrosity it replaced, which had led to a widestpread barter economy.<br /><br />However, today, there is no question that tax rates in the US are well below the Laffer hump, wherever that is exactly. Whether tax cuts lower or increase the growth rate (depends on a lot of things), lower tax rates will unequivocally lower tax revenues at this time anywhere in the US (for state disasters arising from listening to Laffer at this time, see Kansas, Wisconsin, and some pathetic others).rosserjb@jmu.eduhttps://www.blogger.com/profile/09300046915843554101noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-59824227830869615332016-02-23T13:13:06.355-05:002016-02-23T13:13:06.355-05:00Romer and Krugman should have e-mailed Friedman an...Romer and Krugman should have e-mailed Friedman and told him "we are about to go public with our concerns over your paper. Here are our concerns. Please let us know if you want to alter your paper before we go public."<br />Peterhttps://www.blogger.com/profile/08272747870634233567noreply@blogger.com