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A new twist on the Laffer Curve

The Laffer Curve is a description of the theoretical optimum point of taxation rate on a population. It implies that there’s a ’sweet spot’ of taxation where the most income is generated for government coffers. Set the taxation rate too low and the government misses out on potential revenue. Set it too high and an increasing proportion of the population finds ways to avoid tax, moves abroad or simply works less because the extra effort isn’t worth the reduced extra reward. What the Laffer Curve doesn’t explicitly take into account is the effect on a population of the perceived morality of public spending. For example, while an argumentative person might perceive taxation to be nothing more than demanding...

posted on: May 28, 2009 | author: Alex

Government abandons its own golden rules on borrowing and debt...

You might remember that about ten years ago, when the current government was elected, Gordon Brown made a big deal about his strict new rules for government borrowing which were all part of his ‘no more boom and bust’ promise. Anyway, now that we’ve come to the end of the biggest boom in British history and are teetering on the precipice of the biggest bust in British history, Alastair Darling (the guy who replaced Brown when he got bumped up to Prime Minister) has decided that those rules aren’t quite as cast iron as they used to be. Neatly sidestepping the whole issue of the government’s abject failure to deliver on one of its key promises and abandoning...

posted on: Oct 29, 2008 | author: Lance

Sirs,

I am writing to enquire whether you have any vacancies on your strategic board for someone of my talents. I realise that it is a little unorthodox to apply ‘on spec’ for such a high-ranking position within your organisation, but I believe I have the necessary skills to further increase the profits and assets of Big Bank Plc. In this letter I will attempt to demonstrate my knowledge of the challenges and opportunities in our marketplace. 1) Who are our customers? I understand that our most lucrative customers are those with the least awareness of financial matters; indeed, the less numerate they are, the better. Rather like the dear old PM, in fact. If they don’t know the...

posted on: Apr 14, 2008 | author: Alex