The Center for Freedom and Prosperity has released a couple of great videos that make a relatively confusing economic concept–the Laffer Curve–simple. The first explains the basic idea that tax policy affects economic activity, and therefore that the way to maximize government revenue isn’t to jack up tax rates. In fact, when tax rates are much too high, cutting taxes can actually lead to increased revenue. The second video looks at this dynamic in action. It examines the data showing how changes to different tax regimes in the past have affected government revenue.
I’m not doing justice to the videos: I fear I make them sound dry, but they’re not. Take a look and forward to anyone you think could use an education on the Laffer Curve and the effects of tax policy.