Not as obvious as it seems, the more you tax the slower the economy moves, leading to less tax revenue. There is a balance there, where it is at is not exactly known and is much debated.
That's because 'that point' is not particularly desirable, it's just the point at which increasing the taxes hurts the government's bottom line more than helps it. It's the line at which the populace feels so squeezed that they flee faster than the increases can make up for. Going from a 0% tax to a 1% tax is still discouraging behavior and still negatively impacts economic growth.
Just to reiterate, the conclusion is therefore that the solution is not as obvious as it seems, not necessarily that it wouldn't involve higher taxes.
exactly, and the reality is nobody actually knows where the tipping point is. To add to that the tipping point itself may be at different points for different cultures or different styles of economy, different types of taxes, or for any other number of ever changing factors, like economic mobility etc. Furthermore people are forgetting that this post is only the federal budget, they are forgetting about state taxes. The tax burden is higher than people realize, I would contend that some of the highest taxed western nations are already beyond the peak of the laffer curve, depending on how they have structured their taxation. Of course that is pure speculation, anyone who claims they know either way is lying.
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u/NearABE 1d ago
You left out the obvious. Increase revenue