This has got to stop. Unpublished scribbling on a cocktail napkin 35 years ago has set our tax policy on the road to serfdom. As a person who has taught economics, the reason to me is obvious: Economic graphs are intellectual tasers, stunning the general public into submission without a fight. People don't want to engage because surrender is easier and safer. Liberals and progressives, being readers, don't want appear wrong.
The basic idea of the Laffer curve is not so terrible--there are both revenues (good, from the point of view of the sane) and economic disincentives (bad) in all tax rates. At some very high tax rates, near the top of of the y-axis (see the Figure below, slightly modified from the source: http://www.heritage.org/... ), tax cuts could increase revenues because lost revenues are outweighed by economic incentives to increase production. While not signing onto the Laffer curve as drawn in the Figure, I, like President Kenedy, am willing to concede that 100% tax rates are a real disincentive. However, on the lower half of the y-axis, tax increases increase revenues.This is because the economic disincentives are much lower at lower tax rates. This is the part of the Laffer Curve less advertised by the right. And guess what? These are the relevant tax rates for country we live in.
As an example, look at what happens on Laffer's own curve, that he drew, when Bush's tax cuts expire. The top rate will return to 39.5% from 35% (I added those lines), which clearly yields 'To' in revenue, greater than the current revenue level of 'Tb". There may be disincentives, but they are outweighed by revenue gains in the revenue.
One more Laffer trick for the loud teabagger at the barbeque who says, "Reagan proved all tax cuts raise revenues!" Just calmly say, 'so if we went from 10% to 9%, we'd get more revenue? He'll say yes. Then say, 'and 8% raises more than 9%?' and so on until you get to zero--just as the Laffer curve predicts (ignore what Laffer himself says), revenues will indeed be zero if tax rates are zero. If economic laws exist, that's one of them.