> > I'm just wondering if it is even > >possible for the supply and demand curves to be shaped shaped in such a > >way that the Laffer curve does not apply to some market. > > Since you asked... > [snip]
> ... Typical estimates of b are .1 with very high estimates > for aggregate labor supply coming in around .2. Being generous (a=1.5, > b=.2) that would give a revenue maximizing tax rate of .94. [snip] Without understanding the parts I snipped (the whole argument, in other words, heh), I would like to point out that if *my* tax rate was .94, I would need no more incentive to derive 100% of my income from the underground economy. Risking jail is easily worth a reduction in the tax rate from 94% to 0%. I think I understand the insignificance of my personal actions, and their paltry effects on the economy at large, but doesn't it seem unreasonable to expect much tax revenue from a tax rate of 94%? Or is this just one of those counter-intuitive economic conclusions? Throw me a bone here. ;-) Cheers, Michael Giesbrecht Software Engineering Lucasfilm Ltd.
