Quote:
Originally Posted by MarchHare
I think what Clay is trying to say is that provincial revenue from royalties should map easily to a Laffer curve. If the government sets the rate too high, they're disincentiving production and total revenues go down. On the other hand, if the rate is too low, Albertans are leaving money on the table from our one-time non-renewable resource. Are rates currently set at the level where the citizens of Alberta receive the maximum return from our resource? I honestly don't know, but that's certainly a discussion worth having.
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Keep in mind that the Laffer curve pertains to government revenue which is only one part of the net-public-benefit equation. Rates should not be set to maximize government revenue.