[Paleopsych] Ibn Khaldun and the Laffer curve

[Premise Checker]

This reminds me of the late Mancur Olson's distinction between roving and 
stationary bandits. He was one of the few Public Choice scholars who were 
strong political Democrats. Sarah and I talked with him many times at 
various get togethers. Great sense of humor. I'll put together a 
Stationary Bandit Package and send it later.

The idea behind the Laffer curve is that, at a tax rate of 0%, the state 
will get no money. At a rate of 100%, the state will get no money either, 
since no one will work. The revenue maximizing tax rate is therefore 
between 0% and 100%. Champions of current tax cut commonly argue that the 
current rate of taxation is greater than the revenue maximizing rate and 
should be lowered. I don't know what the evidence says, but I reject that 
the gov't should rake in as much as possible, that is, act like a 
stationary bandit.

Khaldun was arguing that the state did a poor job of maximizing its take, 
in that its tax rates were too high.

The paleopsych question is what can restrain bandits generally. Howard?

On 2005-04-24, Lynn D. Johnson, Ph.D. opined [message unchanged below]:

> Date: Sun, 24 Apr 2005 22:14:13 -0600
> From: "Lynn D. Johnson, Ph.D." <ljohnson at solution-consulting.com>
> Reply-To: The new improved paleopsych list <paleopsych at paleopsych.org>
> To: The new improved paleopsych list <paleopsych at paleopsych.org>
> Subject: [Paleopsych] Ibn Khaldun and the Laffer curve
> 
> In the early stages of the state, taxes are light in their incidence, but 
> fetch in a large revenue...As time passes and kings succeed each other, they 
> lose their tribal habits in favor of more civilized ones. Their needs and 
> exigencies grow...owing to the luxury in which they have been brought up. 
> Hence they impose fresh taxes on their subjects...[and] sharply raise the 
> rate of old taxes to increase their yield...But the effects on business of 
> this rise in taxation make themselves felt. For business men are soon 
> discouraged by the comparison of their profits with the burden of their 
> taxes...Consequently production falls off, and with it the yield of taxation.
>   -- Ibn Khaldun, 1332-1406 C.E.