Laffer Curve (named for Arthur Laffer) is a relation between tax rates and tax receipts. Laffer's idea was rather simple, he posited that there was optimal tax rate, above which receipt went down and below which receipts went down.
AbstractThis short article underlines the efficiency considerations reflected by a Laffer curve. In a static context in which inflation is assumed away, the Laffer curve describes what would the response of tax revenue to tax rate change be under increasing inflation if there were allocative efficiency, i. e. given perfect competition and full-employment output.
The debt Laffer curve argument (which was apparently introduced by Jefrrey Sachs) is derived from the tax laffer curve hypothesis introduced by Arthur Laffer (1981), who argues that if personal tax rates were raised, they generate a dreadful impact on government tax revenue.
Downloadable (with restrictions)! Laffer curves for the US, the EU-14 and individual European countries are compared, using a neoclassical growth model featuring “constant Frisch elasticity” (CFE) preferences. New tax rate data is provided. The US can maximally increase tax revenues by 30% with labor taxes and 6% with capital taxes. We obtain 8% and 1% for the EU-14.
Downloadable! Since about 40 years the Laffer curve is used to investigate tax evasion in different ways and with different results. In this paper we present, using a critical literature review, the main considerations related to the Laffer curve starting from historically oldest theoretical models and empirical studies, through direct empirical estimations of the Laffer curve to, widely used.
Laffer introduced the Laffer curve concept, following a meeting with Ford dministration a officials Dick Cheney and Donald Rumsfeld (Fullerton 2008). implication of the The main Laffer curve is that increasing tax rates beyond a certain point counterproductive for raisinis g tax revenue.
Suppose we are on the upper part of the Laffer curve. That means that if the tax rate is lowered, greater tax revenues will accrue to the government.1 Stipulate that the state is an evil institution. This is a libertarian analysis, after all.
The Laffer Curve has 3. This is important for one very specific reason: nearly every argument against the Laffer curve ad homs Laffer to dispute it or mocks the napkin as evidence of, uh, “imaginative” theorizing. But it didn’t come from Laffer, and it didn’t come from Wanniski.