1970s Quote by Richard Thaler
“Arthur Laffer's idea, that lowering taxes could increase revenues, was logically correct. If tax rates are high enough, then people will go to such lengths to avoid them that cutting taxes can increase revenues. What he was wrong about was in thinking that income tax rates were already so high in the 1970s that cutting them would raise revenues.”
About This Quote
Source Article: "The Laffer Curve Revisited", 2000
Tax cuts can boost revenue only if rates are excessively high; otherwise they reduce income.
In simple terms: Tax cuts help only when rates are very high.
Key Takeaway
Assess tax levels before cutting.
Themes
economics
tax policy
public finance
Mood
analytical
cautious
Type
policy
educational
When to use this quote
- government budgeting
- business planning
- policy reform
Key Concepts
Laffer curve
behavioral economics
Questions to Reflect On
- Are current tax rates too high?
- How to identify optimal tax level?
A Different Perspective
Misreading rate thresholds can harm revenue.
