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Laffer curve

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In economics, the Laffer curve illustrates a theoretical relationship between rates of taxation and the resulting levels of the government's tax revenue. The Laffer curve assumes that no tax revenue is raised at the extreme tax rates of 0% and 100%, and that there is a tax rate between 0% and 100% that maximizes government tax revenue. The shape of the curve is a function of taxable income elasticity —i.e., taxable income changes in response to changes in the rate of taxation.

Laffer curve - Wikipedia Jump to content From Wikipedia, the free encyclopedia Representation of the relationship between taxation and government revenue A basic representation of a Laffer curve, plotting government revenue (R) against the tax rate (t) and showing the maximum revenue at t* Part of a series on Taxation An aspect of fiscal policy Policies Economic justice Government revenue Property tax equalization Tax revenue Non-tax revenue Tax law Tax bracket Flat tax Tax burden Tax threshold Taxation as theft Tax shift Tax cut Tax advantage Tax incentive Tax reform Double taxation Tax harmo

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