The Tax System : Slide 2

This concept of limits and not being there is important. In economics, for example, there is a concept called the Laffer Curve. This curve suggests that most economics, whether primitive, modern, post- or pre- industrial, have a tax rate that is optimum for the king's revenue. Clearly, at the limits, a zero tax rate yields zero income to the king. For whatever reasons, much like the moon earlier, an infinite tax rate yields very little income to the king. What is the optimum tax rate? It has been suggested that the optimum tax rate, including all taxes, in all forms, whether religious, secular, local or national, combined should be on the order of 30%. This implies that a political party that needs more revenue and increases the tax rate, or another political party who is decreasing revenue, are both fighting the odds, the king's income, or the revenue to society, is determined by the straddling of the limits; presumably in this case, approximately 30%. No effort to increase revenue by modulating the tax rate helps at all. Other mechanisms of increasing revenue, of course, are not discussed, At the moment, we are talking about tax rate and the limits thereof.


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