29 Replies to “Oh, Shiny Pony!”

  1. I guess we can expect income tax rates of 100% under a future Premier Trudeau?

  2. Did I read the above correctly that Colby cosh doesn’t believe in the laffer curve?
    The laffer curve – which long pre-dated dr laffer – it was just his presentation to dick Cheney back in the Reagan era that gave it his name is as indisputable as gravity:
    At zero tax rates there is zero revenue; at 100% tax there is also Zero revenue – for obvious reasons. Thus somewhere along the zero to 100 tax rate curve there is an optimal rate that produces maximum tax revenues.
    The debate is where that tax rate is.
    After Cheney presented the concept to Reagan he decided to push for a 50 cut in personal tax rates. He and tip O’Neill agreed to meet halfway as 25%. And the economy and tax revenues boomed.
    If JT does not agree with or understand the laffer curve then he is clearly unfit for prime minister.

  3. I think is was wrong re: mr cosh.
    Mr Butts – as I have pointed out in the past is the former pres and CEO of WWF – Canada and is an extreme far left radical. That no one has extensively questioned JT about his long and deep friendship with such an extremist is an indictment of the bias and ineptness of of the Canadian MSM

  5. Does anyone really think the Shiny Pony knows squat about economics let alone ever even heard of the Laffer Curve?
    When it comes to the pack of twits running the Liberal machine and feeding information to their front man Justin it’s closer to a laughter curve to imagine that lot in charge, we’ll be a laughing stock around the globe if he ever gets to top Office.

  6. Is this simply not a graphic representation of the “Law of Diminishing Returns”? Self evident really.

  7. Well, mathematics and liberals are old enemies. Nor do they do all that well with that icky science stuff either.
    The fact is that stupidity is the hall mark of the Canadian liberal and has been for decades now.

  8. He’s also the immediate past Principal Secretary for Dalton McGuinty. What it illustrates is that all the green lunatics cluttering up the Premier’s office are now relocating to Shiny Pony’s coterie. In short, what McGuinty succeeded (!!) in doing in Ontario, JT will try to implement coast to coast.

  9. I have a question. Why is optimal government revenue a good thing?
    Mr. Butts appears to be of the opinion that using government tax rates at the high end of the curve to kill private sector activity is the appropriate policy for the Liberal Party.
    My opinion is quite the reverse. We should cut tax rates to the low end of the curve and kill PUBLIC sector activity by starvation.
    The divine jest of course is that the same thing will happen either way. By high taxes or low, the government will shrink from its present obese and unsustainable size. It’s just that my way avoids the unpleasantness of famine and officials hanging from lamp posts.

  10. I like Tilly LaCampagne’s comments about the Laffer curve and those who still believe in global warming. She tells it like it is.

  12. Phantom:
    I never used the term optimal – the power of the laffer curve is that it demonstrates that there is a point where higher taxes mean lower revenues. And thus that taxes should always be at or below that point.

  13. Has anyone tweeted Gerry about his new idol, Piketty, falsifying his “data”?

  14. Hi Gord, my comment wasn’t meant to refer to yours. Sorry if there was any confusion there. I was just saying that -more- government revenue is not what we want, although that is what the Laffer curve demonstrates.
    Thing about the likes of Mr. Butts, these guys are the avowed enemies of Western Civilization. They want us all living in picturesque low-impact villages, eating Vegan and enjoying hearty outdoor lifestyles featuring stoop agriculture, the gathering of twigs and deer poo for fuel and lots of walking everywhere in home-
    made shoes. But with iPhones, because iPhones are cool.
    Oh, and they get to still live in Rosedale and keep their Beemer because they are the only Smart People in the Sea Of Idiots Who Must Be Controlled. That’s an important point, “do as I say not as I do” is a catechism for the Left.
    Their chosen tool for achieving this end is crushing debt and government confiscation through tax. It works in Africa and South America, why not here?

  15. Similar, but not precisely. The law of diminishing returns holds that for each incremental increase in the independent variable, the change in the value of the dependent variable becomes smaller, and will ultimately approach zero. Hence the increasingly steep slope of the regression line as it approaches the y axis.
    The Laffer curve goes further, positing that for each incremental increase in the independent variable (the tax rate) the change in the value of the dependent variable (tax revenue) will get smaller and smaller, but won’t stop at zero, and will become negative, due to the negative impact of high tax rates on the level of economic activity.
    Which should be self-evident to Mr. Butts (aptly named, IMO), but maybe he hasn’t been paying attention. After all, Stephen Harper has reduced tax rates, and we’ll end up with a balanced budget this year (and, no, the tax cuts didn’t create the deficit in the first place, the recession and the Liberal/NDP coalition’s demand for “stimulus” did that).
    In addition, when Mike Harris came into power in 1995, he was faced with an $11 billion Liberal/NDP coalition deficit, and was on the receiving end of federal transfer payment cuts. And despite reducing personal income tax rates by between 30% and 44%, depending upon how you measure it, eliminated the deficit and still found more money for health care and education (and, no, there was no residual deficit left by the Eves government, as the Ontario Liberal Party has repeatedly, erroneously and curiously claimed; the senior bureaucracy was pretty clear on that point at the time).
    And, given his central role in the McGuinty government, as cgh points out, Mr. Butts really ought to have noticed that the tax increases brought in by that outfit have been surpassed only by the size of Ontario government deficits.
    I’ll be voting for the Tim Hudak plan myself (in fact, I already have), which is partly dependent upon the Laffer curve, which I happen to “still believe in”. Honestly.
    There seems to me to be this canard floating around that Justin Trudeau is stupid, but his advisers are smart. To paraphrase Mr. Butts, “I honestly cannot believe that there are people who still believe in that laugher.”

  16. “The art of taxation consists in so plucking the goose as to get the most feathers with the least hissing.”

  18. My favourite way to illustrate the Laffer curve is to ask the progressive how much money the government would bring in at a 0% tax rate. Then how much money it would bring in with a 200% tax rate (that I immediately explain means that for each $1 you earn, you pay $2 in taxes). There could conceivably be a communist who is willing to give 100% of what they earn to the government (yes, I know, they actually want all OTHER people to give all they earn to the government), but the tax rate of 200% guarantees that there will eventually be $0 available to tax from all individuals.
    Now that we’ve established that there are two locations on the taxation curve that yield $0, everything else falls into place. Some tax increases will bring in less, and there’s some rate that will maximize how much the government can hoover out of your wallet.

  19. Statists will push marginal tax revenue to the negative every time, because they can’t resist increasing tax rates – it’s the answer to everything. In my view we should be asking ourselves where we are on the curve at the moment when we formulate fiscal policy.
    A realist understands lower tax rates can (though not always) result in higher revenues. A statist could never understand this obvious reality as Laffer did, because they believe government produces only positive outcomes, despite overwhelming evidence to the contrary.

  20. The “Laffer Curve” sounds resonable of course if you are a Lefty Liberal or a Dipper not so much.
    If Junior and his “single point of view” party come to power what we will see is the “Bozo Curve”.
    Now the “Bozo Curve” isn’t much of an arc because the weight of the Carbon Taxes and a National Program for everything will push our economy over the precipice.
    JMO

  21. “At zero tax rates there is zero revenue; at 100% tax there is also Zero revenue”
    You really have to qualify that statement because a 100% tax rate is possible when you include mandated work quotas, which is just another word for “slavery”. The trick though is keeping the citizenry brainwashed and happy producing more then their subsistence requires. Gulags where very popular in former communist bloc countries for just those kind of “problems”.
    As for Trudeau and his merry band of new cool looking dudes, they are just that, all brand new shiny feel good rhetoric with zero substance based on economic reality. They preach the politics of “envy” (socialism) that has crept into all aspects of our education system. It is why hardened socialists and their systems are secular or mostly atheist, and have rejected christian teachings not to covet thy neighbours house or goods.

  22. C_Miner said: “My favourite way to illustrate the Laffer curve is to ask the progressive how much money the government would bring in at a 0% tax rate.”
    You lost your progressive at the percent sign. You’d have to spend a week beating the concept of “percentage” into his/her/its head with a spiked cluebat before you could have the conversation. People vote Liberal because of how it makes them feeeeeel, and because they cannot understand the most basic arithmetic.
    The only reason the Liberal government wasn’t overthrown in a paroxysm of rioting and arson 70 years ago is that taxes are taken directly from paychecks before people get their money. If they had to write a check for the full amount every year, they’d have burned down Parliament in the 1930s and salted the ashes.

  24. Reading his TWIT feed…..he’s just another child in the Pony wagon…..my gawd, these people need to be exposed for the fruit loops that they are.
    But the mediots are busy batting cleanup for the Pony….to blind to report the truth…

  25. Phantom – not at all. When it comes to the percentages of women/visible minorities (excluding Asians of course) and sexually confused (you know, those who don’t consider Darwinian evolution when they say society should promote gay/transgendered/inter-species practices for society at large) groups within public sector or military hiring, they have no trouble with percentages.
    We have to find ways to show their wilful ignorance such that they must admit that they know what percentages are, or they’ll have to give ground on one of their other pet projects.

  26. I guess if you ignore centuries of proven calculus its easy to dismiss the curve…..that or you decided to get a degree in the arts majoring in political activism.
    The current crop of arts majors and Paul Martin handlers that co-opted their way into the executive office of the LPC are setting themselves up for a spectacular flame out.
    No it will not end well for them and it will be a train wreck.

  27. I fail to understand how anyone can expect us to believe that canard, David. Fer gawdsakes, his principal eocnomic advisor is Chrystia Freeland, and she was a total airhead when she was editor at the Globe. By the sounds of her statements over the past year, the bimbo content is still quite high.

  28. I (Ph.D. E.E. with an emphasis in Applied Mathematics) had an argument with a very smart Lefty (Ph.D. Physics) at work about the Laffer Curve. He scoffed at first, but as I walked him through the proof, he admitted that is a Laffer Curve, but suggested the maximum is shifted at much much higher tax rates, which is a classic dodge. A quick study of the literature (Google: Econometrics, Laffer Curve) shows that this is taken very seriously.
    Which brings me to my second point: The Laffer curve is all about finding the tax rate which maximizes government revenue. Why is that a good thing? The last thing I want is a well funded government, with all the waste and corruption that brings.

  29. Wow, Noah. At Reader Tips tonight, I will be suggesting folks re-read your comment at this thread, if they have not already done so.
    I’m not in your league, by any means, but both of your arguments appear to me to be the mirror image of Professor W. Edwards Deming’s critique of the conventional-wisdom American idea of the cost of quality in manufacturing between 1945 and 1970, or so. Fortunately, I had Michiel R. Leenders as Operations Professor at the Western Business School, back when that institution actually meant something. I may have been the only one in the class who got Leenders point: you can’t optimize between bad and bad. Take the Laffer Curve and super-impose it over Deming’s graphical representation of the problems with American conceptions of the cost of quality, and see what that comparison shows…
    There are a great many others around here who will get this, and are looking for the same answers.

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