You want guys like Mav to look at a curve theory? If it was something like Laffer Talk, then maybe...
I guess, you will have to wait till the next year to see if i am right. I know i am right but you will have to wait one year to realize that .
I hope for the sake of whoever paid your tuition you got far more than Laffer theory out of your studies. Now, if you can tell us, with reasonable probability of being right, where the maximum in the curve lies for the current U.S. economy, I'll think you've got your, or your sponsor's, money's worth. Good luck in your studies. I'll pass forward to you what one of my economist friends tells me: "There are no jobs for Ph.D. economists." So maybe you should consider graduate school in some other area, assuming you'll need a job eventually.
That's fine. Meantime, you might want to consider this old study by the CBO of what happens when cap gains rates are changed: The 1986 act eliminated special treatment of cap gains, so that they were taxed as ordinary income, at the then highest rate of 28%. So they were comparing revenue at 28% to revenue at 15%, just to set the context of that quote. Behavior does change in response to changes in rates, but overall increased rates lead to increased revenues, and decreased rates to decreased revenue. What the Brits apparently failed to do was to take account of the obvious fact that behavior changes when taxes change. Not the same thing as saying that revenue would actually fall over any reasonable time frame.
since tax revenues have increased after the mellon, kennedy, Reagan tax cuts... its safe to say the maximum on the curve is frequently lower than the tax structure in place at the time of the tax cuts. Also we should not be trying to maximize tax revenue as much as societal well being. the maximum on the curve is the worst tax structure which should be in place.