In an indication of just how screwed the world is and just how little we can trust economists to help unscrew it; An ABC Radio current affairs economic reporter used a large chunk of Ferris Bueller’s Day Off as reference material this week.
Apparently, some economists are suggesting that we go back to Laffer Curve thinking. This very broadly states that an increase in taxation rates does not necessarily mean an increase in tax revenue. The higher the tax, the less incentive there is to work hard and more incentive to dodge.
On the other side of the curve, it is theorised that when you lower taxes, you increase tax revenue by making it more attractive for lots of people to work hard and pay all their taxes.
It is not a widely respected theory, I gather. It was put into practice during the Reagan years and had pretty disastrous results. It is also the progenitor of the phrase, “voodoo economics”.
Knowing that it gave rise to the phrase, was a enough for the deep-probing investigative hacks at Aunty to whip out,
“… anyone?…anyone? Something d-o-o economics… voodoo economics.”
The ABC of course whimped out towards the end. They didn't sign off with,
“You guys don’t have nothin’ to worry about. I’m a professional.”
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