A Laffer curve is a curve on a graph, popularised by the American economist Arthur Laffer, in which the amount of government tax revenue is plotted against the percentage rate of taxation. Supply- side economists believe that this curve is hill-shaped, so that at very high rates of taxation a cut in percentage rates will actually increase government tax revenues. This belief is based on the view that lower tax rates will induce individuals to work harder and earn more income, enabling more tax to be raised at the lower rate. Although the Laffer curve has been very popular politically, there is little empirical evidence to support it. Research Laffer Curve
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Abbreviations
Research Laffer Curve
