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How Income Taxes Distort the Economy


Published February 9, 2023

The Laffer curve shows that there is a tax rate that optimizes the amount of revenue the government can achieve. But the goal isn’t to maximize the government’s revenue, the goal is to maximize and optimize economic prosperity for everyone.

Discussion Questions:

  1. How big should the government be?
  2. When is the role of the government justified versus not justified?

Additional Resources:

  • Read “How Much Do Public Employees Value Defined Benefit Versus Defined Contribution Retirement Benefits?” by Joshua Rauh. Available here.
  • Watch “Tax Flight: Behavioral Responses to State Income Taxation,” with Joshua Rauh on PolicyEd. Available here.
  • Watch “Setting the Record Straight on Wealth Inequality,” with Tyler Goodspeed on PolicyEd. Available here.