Figure 13.2

-Refer to Figure 13.2. If you were a member of Congress who wanted to increase the amount of taxes collected, what would you recommend if the current tax rate was 80 percent?

Question

Figure 13.2
 
-Refer to Figure 13.2. If you were a member of Congress who wanted to increase the amount of taxes collected, what would you recommend if the current tax rate was 80 percent?

Quizplus · Accepted Answer

Based on the Laffer Curve concept, which suggests there is an optimal tax rate that maximizes revenue, if the current tax rate is at 80 percent, reducing it to 70 percent could potentially increase tax revenue by encouraging economic activity and compliance, as rates above the optimal point lead to decreased revenue due to disincentives for work and investment.

Figure 13.2 -Refer to Figure 13.2. If You Were a Member of Were