Laffer curve

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  • noun

Words related to Laffer curve

a graph purporting to show the relation between tax rates and government income

References in periodicals archive ?
Democrats, media, and academics turned on the administration, accusing it of a Laffer Curve forecast, and Wall Street economists kept interest rates high with their absurd prediction that budget deficits resulting from the collapse of inflation would cause inflation to explode.
But when do middle-class Scots fall off the SNP's Laffer curve - PS800, PS1000, higher, lower?
The Laffer curve and me theory of the fiscal bureaucracy.
The Laffer curve is related to the trade-off between distribution (how the pie is shared) and efficiency (the size of the pie) in two ways: First, if the tax rate to be chosen affects very high earners (whose well-being is not very sensitive to small changes in after-tax earnings), then the revenue-maximizing tax rate approximately coincides with the socially optimal tax rate (i.
This was referred to as "scientific taxation"--an early formulation of the Laffer Curve.
He illustrated his counter-intuitive theory via a simple graph that has since become known as--and here the truth is better than the fiction--"the Laffer Curve.
The tax burden is already so high in Europe - several states are close to the top of the Laffer curve - that additional taxes would shrink the economy "considerably," he maintains.
In addition, the downward-sloping curve applies only to the second (bad) section of the Debt- Laffer curve which indicates negative relationship between the stock of external indebtedness and expected of repayment (which represent by the GDP growth rate).
The early back of the napkin version of the Laffer curve would go on to become the basis for Reaganomics and supply-side economics.
Chapter 6 elaborates on this, noting how the social-theoretic approach to public finance can address the dubious nature of concepts like "excess burden" and the Laffer Curve.
Laffer curve has been used in the literature to discuss these three explanations.
Oversupply reduces aggregate taxable value--it's a form of the Laffer curve.
Supply-side voodoo - which claims that tax cuts pay for themselves and/or that any rise in taxes would lead to economic collapse - has been a powerful force within the US Republican Party ever since Ronald Reagan embraced the concept of the Laffer curve.
Armey (1995) implements the Laffer curve to present the relationship between government size and economic growth, from which Vedder and Gallaway (1998) empirically find that government size and economic growth is asymmetric.
2) Usually, the Laffer curve is portrayed as having an inverted U shape, implying that it has both upward and downward sloping sections (see Figure 1).