What follows is my favorite economic joke. I know it's nerdy, but this just cracks me up every time. It's about Reagonomics and "trickle down" theories.
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The Laffer curve, popularized and promoted by economist Arthur Laffer and often used to justify tax cuts, is intended to show that government can maximize tax revenue by setting a tax rate at the peak of this curve and that raising tax rates further actually decreases revenue. The idea is clearest at both extremes of taxation--zero percent and one-hundred percent--where the government collects no revenue. At one extreme, a 0% tax rate means the government's revenue is, of course, zero. At the other, where there is a 100% tax rate, the government collects zero revenue because (in a "rational" economic model) taxpayers have no incentive to work or they avoid taxes, and the government collects 100% of nothing. Somewhere between 0% and 100%, therefore, lies a tax rate percentage that will maximize revenue.
Now . . .
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The neo-Laffer curve is a satirical construct created by Martin Gardner to establish the fallacy of one of many "laissez-faire" ideas that became collectively known as Reaganomics. It demonstrates a basic error of mathematical confusion that held in its sway, among other things, the executive office of the United States of America.