Examples of using Laffer points in English and their translations into Ukrainian
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Computer
The identification of the X(θ) function will enable Laffer points to be calculated.
We will distinguish Laffer points of the first and second kind(a similar approach was used in[6]).
It is clear that this algorithm can generate two Laffer points of the second kind.
The identification of Laffer points according to scenario 2 showed that these points existed only in 1991, 1992, 1995, and 1996.
By identifying the parameters of functions(4) and(5),it is easy to determine Laffer points.
By identifying two Laffer points and comparing them with the actual tax burden, it is possible to assess the efficiency of the country's tax burden and its optimization paths.
Third, in addition to other things, a retrospective assessment of Laffer points performs an indicative function.
In the next year, the situation slightly deteriorated:the actual tax burden was once again between the two Laffer points.
For example, out of eight years, it was onlyin the years 1990, 1993- 1995, and 1997 that Laffer points of both kinds within the tolerance range were detected;
An additional investigation of the properties of functions(4) and(5) will make it possible todetermine whether the stationary points obtained are Laffer points.
Second, the βi, parameters are constant in time,leading in some cases to the invariability of Laffer points(in particular, this situation exists for a quadratic function).
In the remaining years, the detected stationary points were points of local minima, and hence,they do not fall under the definition of Laffer points.
To begin with, calculations according to both scenarios demonstrate an extreme instability of Laffer points, which serve as the principal indicators of the efficiency of state fiscal policy.
Within the class of algebraic methods,two approaches to calculating the efficiency of the fiscal system by means of Laffer points are possible.
Second, constructing dynamicseries of estimates of the efficiency of fiscal policy(Laffer points) is of major importance for forecasting the results of the state fiscal policy.
If Laffer points of the first and second kind for dependencies(14) and(15) exist, then, the production curve and its analogue in the form of the fiscal curve will appear as shown in the figure.
Such careless actions by the government in the tax sphere arereflected in clearly degenerate results for 1993- 1994: the Laffer points assumed negative values.
The second(applied) line involves practical calculations of the values of Laffer points(points of inflections on the fiscal curve) for individual countries; this is in fact a special part of the theory of macroeconomic assessment.
However, the aforementioned fiscal depression was immediately followed in 1995 by a dramatic improvement of the taxclimate: for the first time, the actual tax burden was below both Laffer points.
An important consideration insubsequent calculations is that all of the methods for estimating Laffer points described above work for macroindices calculated in both current and comparable prices.
Comparing the fiscal points θ, θ*, and θ** derived from calculations according to scenario 1, one may argue that almost throughout the transition period, the level of actual taxburden in Russia covered both Laffer points.
It is this fact that dictates the use of two- and three-parameter analytical methods for estimating Laffer points as the simplest methods that most adequately correspond to the present economic conditions.
For example, the discovery of a situation in which the actualtax burden is shifted to the right beyond both Laffer points can signal the appearance of serious clashes between the interests of producers and the state.
Analysis of the second- order conditions shows the following: in order for the stationary points(19) and(20)to be Laffer points, it is necessary and sufficient that the following two inequalities be satisfied: βgt; 0 and γ< 0.
In my view, a practical criterion for determining whether ornot this requirement is met is the stability of Laffer points over a period of at least three to five years(fluctuations between their extreme values should not exceed 2- 3%).
It is desirable that this should be a quadratic or, at least, cubic function, because a higher order of the polynomial will subsequently make it more difficult to find Laffer points(polynomials of degree three and higher lead to the multiplication of stationary points of the production curve X= X(θ)and require an additional procedure for their filtering in order to identify Laffer points among them).
And a Laffer point of the second kind θ**, when d2T/dθ2= 0, is found by solving the following quadratic equation:.
A Laffer point of the first kind θ*, when dX/dθ= 0, is determined from the formula.
However, it is higher than the Laffer point of the first kind, and this means that the existing tax pressure stimulates a decline in production, thereby conflicting with this country's long- term economic interests.
It means that the actual tax burden is lower than the Laffer point of the second kind and, hence, from the standpoint of the state's financial interests, has a fairly normal value.