The Laffer curve shows the relationship between

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The Laffer curve demonstrates the relationship between tax revenues and income tax rates. The curve assumes that at low tax rates, increasing tax rates will lead to increased tax revenues, as taxpayers will continue to work and invest. However, at some point, further increases in tax rates will result in a decrease in work and investment, and therefore a decrease in tax revenues. This is known as the "revenue-maximizing" point of the curve. Beyond this point, further increases in tax rates will result in a decrease in tax revenues.

The Laffer Curve Shows the Relationship Between