"The income effects in an economy always sum to zero"

This quote by Arthur Laffer is referring to the idea of earnings effects in an economy. This principle mentions that when an economic occasion happens, the overall income of all people in the economy will stay the same. This is due to the fact that when someone gains income, another person should lose income in order for the total income to remain the same. This concept is very important to understand when examining the impacts of economic policies. For example, when a federal government carries out a tax cut, the total earnings of the economy will not change, as the people who receive the tax cut will have more money, however the people who pay the taxes will have less cash. This quote is emphasizing that the earnings impacts in an economy always sum to zero, meaning that the total income of the economy will stay the exact same.