From Frank Holmes, CEO, U.S. Global Investors:
In 1974, the American economist Arthur Laffer, then a professor at the University of Chicago, was having dinner with his friend Jude Wanniski, an associate editor of the Wall Street Journal. They were joined by Donald Rumsfeld and Dick Cheney, both of whom worked at the time in the Gerald Ford administration. The topic at hand was President Ford’s Whip Inflation Now, or WIN, initiative, which included proposed tax increases.
According to Wanniski’s version of the story, which he recounted years later in a WSJ article, Art grabbed a napkin and sketched out what Wanniski dubbed “the Laffer curve.” Put simply, the Laffer curve illustrates what happens when the government raises taxes too much — theoretically, it ends up bringing in less revenue than before the tax hike. Why? Taxpayers feel less incentivized to work if everything they earn is handed over