As I’ve mentioned a few times before, I also write for BloodhoundBlog, surely one of the most respected real estate blogs in the country. They offer many, many contributors from various sectors of the real estate universe. They write about every real estate subject you might imagine, and some you wouldn’t in a million years. They surprise me regularly. They are also very informed.
Though putting Bloodhound on your daily to-read list is something I wholeheartedly recommend, it’s not the purpose of this post.
No, the purpose of this post is to pimp something I wrote over there. 
I came across a video which in a few short minutes, using plain English, explains the Laffer Curve brilliantly. I also offer a few opinions, and say a few things I might not here. This blog is for real estate investors or those that wish to become one.
In any case, I invite you to wander over there and take a look at the post, Understanding the Laffer Curve… as I think it’s a topic in tune with our economic times — not to mention what’s looming for us this coming November.
Arthur Laffer will be shown to have been one of the most brilliant economists of his generation. His theory has proven in application to be one of what I’ve come to call The Physics of Economics.
While you’re there, and after you’ve read the above linked post and watched the brilliant video, take some time to browse around. Read three posts at random and I bet you’ll be hooked.
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About BawldGuy
They write about every real estate subject you might imagine.
They write about some perspectives of every real estate subject you might imagine.
May they never change. Still some bigger picture balance is necessary. In some circles Bloodhound isone of the most respected real estate blogs in the country. In others it is the most reviled. It is going to take more than the few years that have elapsed since the vile insults thrown out at people in mid 2006 who had the gall to suggest there was an imminent danger of a housing bubble collapse.
Read it for what it is but don’t forget what it is. Steve Martian’s “Plumbing Joke” is legend precisely because it skewers insider insularity.
Comment posting ate my italics and quotes. Sorry.
Jeff – A great post and something I pray Americans take the time to understand how the Laffer Curve works and ignored by too many politicians looking to make vote-getting minute sound bites!
Tony — As you and I know, the Laffer Curve is apolitical. It works no matter who makes use of it. What is scary to me, is when the first liberal sees its potential for creating more money to spend.
Thanks
The beauty of the Laffer Curve is that it nearly always shows that beneficial transactions are overtaxed even if the sole goal is to raise revenue.
The greater generalization has an interesting impact on choosing investment properties. Urban densities have a similar “U” shaped optimal density where costs such as taxes and utilities and less clearly insurance and similar costs. To keep costs low it is better to choose neither low density rural or high density central urban.
I wouldn’t grant that thinking axiom status, but it probably turns out to be true many more times than not.
A real estate investor who relies on axioms for results usually ends up only getting the ax part.
That sentence conveys absolutely nothing but a cute thought.
It also carries with it zero value.
Axioms are accepted as true because that’s been their history.
For instance, when lenders stop lending they’re not lenders. Therefore, if relying on the axiom ‘lenders lend’ is dangerous, we’re all in trouble.
The saying is cute though, I’ll give you that.
Guilty, I was just being cute while agreeing with you. But seriously think about applying the Laffer Curve as I suggest. Include things like Mello-Roos and HOAs. It gets hard to justify places with high taxes very low taxes even when the former can usually command higher rents and the latter enjoy lower carrying costs. There is IMO a sweet spot.
Watch the video — it pinpoints the sweet spot.
That very spot is why Laffer picked 28% as the top marginal rate in Reagan’s tax cut.
I cannot wait for parts II and III. It should be delicious.