{"id":38104,"date":"2019-04-23T01:00:20","date_gmt":"2019-04-23T05:00:20","guid":{"rendered":"http:\/\/quotulatiousness.ca\/blog\/?p=38104"},"modified":"2019-03-23T08:29:57","modified_gmt":"2019-03-23T12:29:57","slug":"qotd-cities-and-the-laffer-curve","status":"publish","type":"post","link":"https:\/\/quotulatiousness.ca\/blog\/2019\/04\/23\/qotd-cities-and-the-laffer-curve\/","title":{"rendered":"QotD: Cities and the Laffer Curve"},"content":{"rendered":"<blockquote><p>&#8230; government finances are ultimately constrained by the much-maligned Laffer Curve. There is some point, however high the percentage, beyond which raising the tax rate not only doesn\u2019t bring in more revenue, but actually lowers government income. And the smaller the level of government, the lower the tax rate at which Laffer effects kick in. If your block had the ability to levy a 25 percent tax on your income, and actually did so, you\u2019d sell your house pretty quick. It\u2019s much harder to pick up and move to another country. We also have to factor in the fact that, in a democracy, voters can go to the polls and say \u201cno more,\u201d which is a sort of secondary Laffer point that people planning in decades have to reckon with.<\/p>\n<p>Cities tend to declare bankruptcy precisely because they\u2019re near one of those points, through some combination of financial mismanagement and local economic decline. When they have exhausted their ability to borrow, or wheedle bailouts out of some larger government entity, they end up with an unpalatable choice between cutting municipal services or failing their creditors &#8230;<\/p>\n<p>Megan McArdle, <em>Bloomberg View<\/em>, 2017-04-11.<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>&#8230; government finances are ultimately constrained by the much-maligned Laffer Curve. There is some point, however high the percentage, beyond which raising the tax rate not only doesn\u2019t bring in more revenue, but actually lowers government income. And the smaller the level of government, the lower the tax rate at which Laffer effects kick in. [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":35193,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[25,84,41],"tags":[71,1110,118],"class_list":["post-38104","post","type-post","status-publish","format-standard","hentry","category-economics","category-government","category-quotations","tag-debt","tag-laffercurve","tag-taxes"],"jetpack_featured_media_url":"https:\/\/quotulatiousness.ca\/blog\/wp-content\/uploads\/2016\/06\/favicon.png","jetpack_shortlink":"https:\/\/wp.me\/p2hpV6-9UA","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/38104","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/comments?post=38104"}],"version-history":[{"count":2,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/38104\/revisions"}],"predecessor-version":[{"id":47458,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/38104\/revisions\/47458"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/media\/35193"}],"wp:attachment":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/media?parent=38104"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/categories?post=38104"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/tags?post=38104"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}