Investment dictionary

LAFFER CURVE

Laffer Curve: translation

Invented by Arthur Laffer, this curve shows the relationship between tax rates and tax revenue collected by governments. The chart below shows the Laffer Curve:


The curve suggests that, as taxes increase from low levels, tax revenue collected by the government also increases. It also shows that tax rates increasing after a certain point (T*) would cause people not to work as hard or not at all, thereby reducing tax revenue. Eventually, if tax rates reached 100% (the far right of the curve), then all people would choose not to work because everything they earned would go to the government.

Governments would like to be at point T*, because it is the point at which the government collects maximum amount of tax revenue while people continue to work hard.

  1. laffer curve—Laffer curve translation A curve conjecturing that economic output will increase if marginal tax rates are cut. Named after economist Arthur Laffer. Bloomberg Financial D...Financial and business terms
  2. laffer curve—Кривая Лэффера зависимость экономического роста от уровня налогов...Англо-русский словарь по экономике
  3. laffer curve—эк. кривая Лаффера кривая показывающая связь между налоговыми ставками и объемом налоговых поступлений считается что в конкретных экономических условиях существует оптима...Англо-русский экономический словарь