supply-side economics

nationality

American

occupation / innovator as

economist

cause of death

natural causes

is the idea that increased taxation steadily reduces economic trade between economic participants and discourages investment. By taking money out of the economy, the argument follows, taxes act as a type of trade barrier or tariff.

Supply-side economics holds that increased taxation steadily reduces economic trade between economic participants within a nation and that it discourages investment. Taxes act as a type of trade barrier or tariff that causes economic participants to revert to less efficient means of satisfying their needs. As such, higher taxation leads to lower levels of specialization and lower economic efficiency. The idea is said to be illustrated by the Laffer curve. (Case & Fair, 1999: pp. 780-1). This is not supported by historical data, which instead shows a positive correlation.[37]

is the wrongheaded idea that the government could maintain expenditures, cut tax rates, and balance the budget all at one go.

The extreme promises of supply-side economics did not materialize. President Reagan argued that because of the effect depicted in the Laffer curve, the government could maintain expenditures, cut tax rates, and balance the budget. This was not the case. Government revenues fell sharply from levels that would have been realized without the tax cuts. Karl Case & Ray Fair, Principles of Economics (2007), p. 695.[45]

Karl CaseThinkers

Karl Case