The Laffer curve suggests that if tax rates get too ____,the government's tax revenues will ____.

Question

Quizplus · Accepted Answer

The Laffer curve shows that as tax rates increase, there comes a point where tax revenues will start to decrease because the higher taxes act as a disincentive for people to work, invest, and consume. Eventually, if taxes get too high, people will no longer be willing to work and invest because they will receive too little reward for their efforts, and tax revenues will begin to decline. Therefore, if tax rates get too high, the government's tax revenues will fall.

The Laffer Curve Suggests That If Tax Rates Get Too