Policy makers who believe in the Laffer curve should:

Question

Quizplus · Accepted Answer

According to the Laffer curve, at a certain point increasing tax rates can lead to a decrease in revenue. Therefore, decreasing income tax rates for the highest wage earners could potentially lead to an increase in revenue as they are incentivized to work harder and invest more. This concept does not apply to increasing tax rates for either the highest or lowest wage earners. Decreasing tax rates for the lowest wage earners may also be beneficial for economic growth and reducing income inequality.

Policy Makers Who Believe in the Laffer Curve Should