According to the Laffer curve, raising the tax rate

Question

Quizplus · Accepted Answer

The Laffer curve shows that at very low tax rates, increasing the tax rate will increase tax revenue. However, at some point, further increases in tax rates will discourage economic activity and decrease tax revenue. Therefore, it is possible that raising the tax rate might increase, decrease, or not change the amount of tax revenue. The exact point at which this occurs depends on various factors, such as the elasticity of demand for the goods or services being taxed and the level of economic activity in the economy.

According to the Laffer Curve, Raising the Tax Rate