The Laffer curve is the relationship between

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The Laffer curve shows the relationship between tax rates and tax revenue. As tax rates increase, tax revenue also increases up to a certain point, known as the revenue-maximizing rate. After this point, increasing tax rates would lead to a decrease in tax revenue, as taxpayers would be discouraged from working or investing due to the high tax burden. Therefore, the Laffer curve suggests that there is an optimal tax rate that maximizes revenue.

The Laffer Curve Is the Relationship Between