The Laffer Curve

The Laffer Curve is a graph that demonstrates the relationship between how high tax rates are and how much money the government will bring in revenue. If the tax rate is 0, then the government will bring in $0. However, if the tax rate is set at 100%, the government will also bring in $0 because there will be no economy. So, logic suggests the relationship between tax rates and government revenue is an arc, or a curve, and not a straight line. This means there is some percentage at which government revenue is maximized. Any tax rate below that theoretical point and the government brings in fewer dollars. Any tax rate above that theoretical point and the government will bring in fewer dollars as well because the tax rate itself will restrict the overall economy. The Laffer Curve was used to justify Ronald Reagan’s 1981 tax cut, dropping the top tax rate down from 70% to 31%. By 1989, the total dollar amount collected by the federal government had doubled even though the tax rate itself was much lower.

 

 

Related posts:



0
Connecting
Please wait...
Send a message

Sorry, we aren't online at the moment. Leave a message.

Your name
* Email
* Describe your issue
Login now

Need more help? Save time by starting your support request online.

Your name
* Email
* Describe your issue
We're online!
Feedback

Help us help you better! Feel free to leave us any additional feedback.

How do you rate our support?

Supporting the Conservative Cause Has Never Been Easier.

 

Contribute $100 to Conservative Ground and...

 

 

  

Supporting the Conservative Cause Has Never Been Easier.

 

Contribute $250 to Conservative Ground and...

 

 

  

Supporting the Conservative Cause Has Never Been Easier.

 

Contribute $500 to Conservative Ground and...

 

 

  

Conservative Coaching for Patriots 

 

 

Conservative Coaching for Leaders

 

 

Conservative Coaching for Believers

 

 

Conservative Coaching for Parents

 

 


 

This is for all the dreamers; the ones who say anything is possible, who believe the greatness of America is the greatness that lies within each of us.

 

 


 

This is for the leaders; the ones who are willing to step up and serve, who have a burning passion to help others find the greatness within.

 

 


 

This is for all the mothers and fathers; the ones who believe in the promise and potential inside every child, who want to ensure liberty thrives for another generation.

 

 


 

This is for all the faithful; the ones who say, “yes” when called, who want to give Glory to God for the blessings He has given to America.