Taxes & Laffer Curves

I would like to expand slightly on my last post, with the following observation:

The purpose of taxes and tax policy should not be to "raise as much revenue as possible", i.e. to transfer as much money as possible from private individuals to the government.  Rather, the aim of tax policy should be to raise only the amount of tax necessary to fund the services which we collectively wish the government to supply.

This comes with additional caveats, such as publicly funded projects should be required to meet certain minimum criteria for funding, such as passing cost-benefit analyses.

Chris Dillow on Laffer Curves

Chris Dillow blogs on Laffer Curves over at Stumbling and Mumbling.

A slice:

"8. There are two contrary but tenable positions here.  One is "the revenue-maximizing tax rate might be high, but high taxes are undesirable because they infringe freedom."  The other is "The revenue-maximizing tax rate could be low, but high taxes are justified to reduce the adverse effects of inequality."  Both of these positions are rare - which makes me suspect that there's quite a lot of motivated reasoning on both sides."

My position is something akin to the former, i.e. "the revenue-maximizing tax rate might be high, but high taxes are undesirable because they infringe freedom."

Worthwhile reading the whole thing, it is short and contains a lot of clear insight.