The Laffer Curve Bend At 84%
If you tax cigarettes, then cigarette tax revenue tends to rise. At the same time, the higher taxes may inspire people to quit smoking or to buy packs on the black market both of which tend to make revenue fall. There's some revenue-maximizing price point out there beyond which higher taxes produce lower revenue. And the same, one would think, applies to income taxes. But where is that number? Christina Romer and David Romer have a new paper looking at evidence from the 1920s and 1930s and find that the revenue-maximizing rate on the highest earners is extremely high—over eighty percent. Among the top 0.05 percent of the income distribution they find an elasticity of taxable income of 0.19 percent which implies "implies that tax revenues would be maximized with a tax rate of 84 percent; that is, you could raise taxes up to 84 percent before people’s reduced incentives to make money would compensate for the higher tax rates."...MORE*For British politicians of a certain age [often referred to as octo or nona-genarians -ed] the scandal surrounding Secretary of State for War John Profumo's affair with the alleged mistress of a Russian spy was highlighted by the testimony of Miss Rice-Davies, a friend of the alleged mistress, Christine Keeler.
While giving evidence at the trial of Stephen Ward, charged with living off the immoral earnings of Keeler and Rice-Davies, the latter made a famous riposte. When the prosecuting counsel pointed out that Lord Astor denied an affair or having even met her, she replied, "Well, he would, wouldn't he?"We've tried to keep the phrase alive, using it about once per year:
Gore Says Markets are Key in Battle to Combat Climate Change
"Well, he would, wouldn't he?"2007
Mandy Rice Davies*
ICE, Skating on Thin
TESTIMONY OF JEFFREY C. SPRECHER CHAIRMAN AND CHIEF EXECUTIVE OFFICER, INTERCONTINENTALEXCHANGE, INC.2008
Warning: Mandy Rice-Davies moment ahead.
"...we do not believe that a complete overhaul of the current regulatory structure is either warranted or advisable."
UN Can Regulate Emissions Trading Without Conflict of Interest
All together now: A Mandy Rice-Davies Moment!*2009
Major Problems at California's Public Pension Fund, CalPERS And: A Mandy Rice-Davies Moment!
One of these days I'll have to tell the story of how CalPERS got to this point. It is an ugly tale. For now we'll just post the slow motion train wreck.One of my favorite usages:
On a positive note: Mandy Rice-Davies* moment ahead!
Lord McIntosh of Haringey: My Lords, I am proud of many things that this Government have done. I pause to anticipate the interjection—"He would say that, wouldn't he?"...