The Laffer Curve, as Explained in 1377

Ibn Khaldun:

It should be known that at the beginning of the dynasty, taxation yields a large revenue from small assessments. At the end of the dynasty, taxation yields a small revenue from large assessments.

The reason for this is that when the dynasty follows the ways (sunan) of the religion, it imposes only such taxes as are stipulated by the religious law, such as charity taxes, the land tax, and the poll tax. They mean small assessments, because, as everyone knows, the charity tax on property is low. The same applies to the charity tax on grain and cattle, and also to the poll tax, the land tax, and all other taxes required by the religious law. They have fixed limits that cannot be overstepped.

When the dynasty follows the ways of group feeling and (political) superiority, it necessarily has at first a desert attitude, as has been mentioned before. The desert attitude requires kindness, reverence, humility, respect for the property of other people, and disinclination to appropriate it, except in rare instances. Therefore, the individual imposts and assessments, which together constitute the tax revenue, are low. When tax assessments and imposts upon the subjects are low, the latter have the energy and desire to do things. Cultural enterprises grow and increase, because the low taxes bring satisfaction. When cultural enterprises grow, the number of individual imposts and assessments mounts. In consequence, the tax revenue, which is the sum total of (the individual assessments), increases.

Read the whole thing.

Via Isegoria.

5 thoughts on “The Laffer Curve, as Explained in 1377”

  1. I misread the headline as “The Laffer Curve, as Explained in 1337“.

    I need to spend less time at my computer.

  2. When you think of it, the United States of America represents the ultimate “blowback” against Islamic statecraft.

    How, you may ask?

    There was a brief period of time when the Mongols ruled much of Asia and parts of Africa and Europe. Militarily, they were unstoppable. There may have been a number of factors, cultural and technological, but my understanding is that they were superb horsemen, and they had the recurve bow, and they were able to shoot in motion.

    Now contact with the Mongols was an ugly thing as they used their military prowess to frightening effect. But once you were conquered by the Mongols (you will be assimilated, resistance is futile — could you surrender to those folks or did they have to kill a bunch of your people first, because they were Mongols?) — being ruled by the Mongols apparently wasn’t such a bad thing.

    You see, the Mongols in peace time were thoroughly Libertarian. Low taxes and low tariff barriers, free passage within their territories, complete ambivalence to whatever religious beliefs or practices you held.

    What happened next is that Mongol rule collapsed, perhaps because of a combination of “overstretch” and not having worked out rules of dynastic succession very well.

    What happened in the mean time is that Europeans got used to the world’s first era of globalization and free trade, in terms of spices and other goods from the Far East. What happened after that is the the Arab-Muslim Middle East got back on its feet as it were and reverted to the traditional ways of high taxes on the trade caravans.

    And what happened after that is that the folks in Portugal developed the sea route East around Africa, and the envious Spanish developed the sea route West to what proved to be a whole ‘nother continent, and English Hank was paired up with Spanish Cathy so that the emerging nation in England could benefit from relations with the Spanish Superpower, and now you know the Rest . . . of . . . the . . . Story.

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