The Laffer Curve

Dan Mitchell of the Cato Institute explains why cutting taxes increases revenue to the treasury and raising taxes actually reduces revenue. Every voter ought to be familiar with the basic idea behind this because it forms the Republican rationale for not wanting to raise taxes:

Despite this economic fact of life the Democrats had to be brought kicking and screaming to extending the Bush tax cuts last winter. They wanted to raise the rates on the "wealthiest Americans" beyond point B which would have stifled growth and produced less revenue.

Why did they want to do that? Either they don't know about the Laffer curve, or they don't believe the Laffer Curve, or Mitchell's rendering of it, is an economic "fact of life", or they so despise the rich that they want to punish them regardless of the effect it has on job growth and revenue. Whichever it is, before they try again to raise taxes they ought to explain to us which of those three alternatives applies to them.

Thanks to Big Government for the video.