From the Krugman Blog


	From the Krugman Blog

BobbyDelray

10-19-2007 11:55 AM

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tags:

laffer test, krugman, paul, gdp, revenue, taxe, receipts

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<div style="margin: 12px 0px; font-family: arial; color: #333333; background: #ffffff; border: solid 4px #e5e5e5; width: 100%; clear: left;"><div class="CM_CTB_Content_Wrap" style="margin: 0px; padding: 0px;background-color: #ffffff;"><div style="border-bottom: solid 1px #dcdcdc; white-space: nowrap; margin-bottom: 8px; background-color: #eeeeee ;background-image: url(http://clipmarks.com/images/source-bg.gif); background-repeat: repeat-x; height: 24px; line-height: 24px; vertical-align: middle; padding-bottom: 4px; color: #666666; font-size: 10px;" ><a href="http://clipmarks.com/clip-to-blog/" title="see clips that are hot right now"><img src="http://content.clipmarks.com/blog_embed/7b2ee5dc-ce46-4b90-8bf2-426c926e6a6c/F8EDD87B-805C-4310-B32D-5441823DFE02/" alt="" width="19" height="19" border="0" style="vertical-align: middle; margin: 0px 4px; display: inline; border: none; float:none;" /></a>clipped from <a title="http://krugman.blogs.nytimes.com/2007/10/16/failing-to-pass-the-laffer-test/" href="http://krugman.blogs.nytimes.com/2007/10/16/failing-to-pass-the-laffer-test/" style="font-size: 11px;">krugman.blogs.nytimes.com</a></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://krugman.blogs.nytimes.com/2007/10/16/failing-to-pass-the-laffer-test/"><H2>Failing to Pass the Laffer Test</H2></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://krugman.blogs.nytimes.com/2007/10/16/failing-to-pass-the-laffer-test/"><P>The revenue boom of the last few years, which mainly depended on booming corporate profits, is over. Here’s a chart from the Congressional Budget Office:</P></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://krugman.blogs.nytimes.com/2007/10/16/failing-to-pass-the-laffer-test/"><div align="center"><img src="http://content6.clipmarks.com/blog_cache/krugman.blogs.nytimes.com/img/1D54C1E6-8F1B-41A5-8E88-D0AA8681AA6A" alt="Chart: Congressional Budget Office" /></div></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://krugman.blogs.nytimes.com/2007/10/16/failing-to-pass-the-laffer-test/"><P>And a further slowdown is visible within the fiscal 2007 data: revenue in September was up only 2 percent from the previous year.</P></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://krugman.blogs.nytimes.com/2007/10/16/failing-to-pass-the-laffer-test/"><P>To put this in perspective, here’s revenue as a percent of GDP since Clinton took office:</P></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://krugman.blogs.nytimes.com/2007/10/16/failing-to-pass-the-laffer-test/"><div align="center"><img src="http://content7.clipmarks.com/blog_cache/krugman.blogs.nytimes.com/img/FB8DCBB8-5EF4-42E3-9057-E3FA0B39DAA9" alt="Chart: Revenue as Percent of GDP Since 1993" /></div></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://krugman.blogs.nytimes.com/2007/10/16/failing-to-pass-the-laffer-test/"><P>So everything you’ve heard about how revenues have boomed since the Bush tax cuts is wrong. What really happened was that revenue plunged, as a percent of GDP, in the early Bush years, then staged a partial, but only partial, recovery. And that recovery seems to have run its course.</P></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://krugman.blogs.nytimes.com/2007/10/16/failing-to-pass-the-laffer-test/"></blockquote></div><div style="margin: 0px 6px 6px 4px;"><table style="font-size: 11px;border-spacing: 0px;padding: 0px;" cellpadding="0" cellspacing="0" width="100%"><tr><td style="background:transparent;border-width:0px;padding:0px;">&nbsp;</td><td align="right" style="background:transparent;border-width:0px;padding:0px;width:107px" width="107"><a href="http://clipmarks.com/share/F8EDD87B-805C-4310-B32D-5441823DFE02/blog/" title="blog or email this clip"><img src="http://content8.clipmarks.com/images/c2b-foot.png" border="0" alt="blog it" width="107" height="17" style="border-width:0px;padding:0px;margin:0px;" /></a></td></tr></table></div></div>