Politics & Power Quote by Arthur Laffer

Laffer’s sentence looks like a bland piece of Econ 101 realism, but it’s doing hard political work. The key move is to treat “income” not as a fixed fact of life but as something pliable: it can get louder or quieter (volume), move across borders (location), or be relabeled (composition). That triad isn’t just descriptive; it’s a warning shot aimed at lawmakers who talk about “raising taxes on the rich” as if they’re taxing a stationary object rather than a set of options.

The intent is to smuggle behavioral response into the middle of policy debate. If people can shift when, where, and how they’re paid, then higher tax rates won’t simply harvest more revenue from the same base; they’ll change the base itself. “Composition” is the slyest term here, pointing to the legal alchemy of compensation: wages become capital gains, bonuses become deferred pay, income becomes corporate profit, profits become paper losses. The sentence flatters sophistication while implying that the government is perpetually a step behind the taxpayers who can afford accountants.

Context matters: Laffer is the Laffer Curve guy, the supply-side economist whose brand is the idea that incentives bite and that tax policy can be self-defeating. Framed this way, redistribution becomes a cat-and-mouse game, and the mouse has better lawyers. It’s also a moral nudge: if outcomes shift after policy changes, it’s not “evasion,” it’s “response,” a neutral, almost scientific word that launders self-interest into rational adaptation.