One of the problems with the Laffer curve is that no one has been able to draw one using actual data.

You notice that when an example is shown there are never any labels on the axes. Even if it were a real sociological effect, how would you demonstrate it?

At any given period of time there are so many forces at work how can a single action be shown to be the cause of some economic activity.

What we do know is that the change in growth rates and tax rates don't follow any clear cut correlation. We also know that the growth in government expenditures has been covered by borrowing for much of the recent past. Historically this is always a prelude to inflation.

The Laffer curve is just another of a continuing justifications as to why the rich need to keep getting richer.


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