Which statement best summarizes the idea of cutting income tax rates increase tax revenue
A)This argument is only valid for the United States but not for most other countries.
B)This argument is valid for all countries that have income taxes.
C)This argument is valid for most other countries but not the United States.
D)The argument is valid for any country that has very high marginal tax rates.

Question

Quizplus · Accepted Answer

The argument is based on the Laffer Curve, which suggests that cutting income tax rates can increase tax revenue if the initial tax rates are prohibitively high, discouraging income generation and reporting.

Which Statement Best Summarizes the Idea of Cutting Income Tax