We have all heard of the Laffer Curve, named after the Reagan Era wunderkind, Arthur Laffer. Laffer used a curve to illustrate the optimum rates of taxation to yield maximum revenue to the federal government. Revenue at each end of the curve equals zero. At one end, when there is no taxation at all, there is obviously no revenue. Similarly, when there is a 100% rate of taxation, there is also no revenue. Who would work if every cent you earned was taken from you?
Laffer’s curve accurately predicted that federal revenues would increase if Ronald Reagan cut taxes, because the rate of taxation in place before the cut was lower on the curve than the rate of taxation after the cut.
There are many outstanding economists whose work we’ve not seen. What about Hauser’s Law? And the Rahn Curve? Or the Elasticity of Taxable Income (ETI)? We’ve all heard of Hayek, but what about his mentor, Ludwig Von Mises? We all know there is something inherently off-base with Keynes’ economic model, but how many of us can carry on a discussion citing various flaws in his theory and point to competing ideas?
We need a Voices of the Tea Party e-book that explains these ideas and puts them into context using present-day examples. I would love to see an Economic Theory for Tea Partiers – a primer to give them a foundation in some on the most important free market thinkers and their theories from Adam Smith to Milton Friedman and everyone in between.
I think of this as an updated version of that classic by Henry Hazlitt, Economics in One Lesson. Hazlitt is the former New York Times columnist (that’s right–he worked for the New York Times!) whose life work was to popularize the Austrian School of Economics. Ronald Reagan read the book back to cover when he worked as a spokesman for General Electric back in the early 1950s.
But it’s been over half a century since Hazlitt wrote his classic. Time to provide an up-to-date primer on economics–a 2011 version of Economics in One Lesson.
Christina Botteri is a co-founder of the Nationwide Tea Party Coalition, and is the social media strategist behind the successful launch of the Tea Party movement in February, March, and April of 2009. She can be reached on Twitter atChristinaKb .