Laffer curve Flashcards
1
Q
What does the laffer curve say?
A
It says that an increasing taxes will increase tax revenues up to a point t.
But beyond this point there will be a reduction in tax revenue.
2
Q
Why does laffer argue this?
A
Disincentives for people to work. Lack of entreprenurship and labour.
Emigration. People may move away so they can earn more.
Tax evasion.
