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The Laffer Curve

The Laffer Curve. The analysis here is based on ideas made more popular by the man Arthur Laffer. Tax rate. Laffer’s idea is that as the marginal tax rate rises tax revenues first rise, but then tax revenues bend back and fall as marginal rates are raised more. This is the L affer curve.

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The Laffer Curve

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  1. The Laffer Curve The analysis here is based on ideas made more popular by the man Arthur Laffer

  2. Tax rate Laffer’s idea is that as the marginal tax rate rises tax revenues first rise, but then tax revenues bend back and fall as marginal rates are raised more. This is the Laffer curve Note the Laffer curve does indicate if the marginal rate is high, a cut in the marginal rate could lead to higher tax revenues. Tax revenue These arrows are the progression as tax rates continue to rise. Can you draw the arrows as tax rates continue to fall?

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