At tax rates higher than the tax rate that maximizes tax revenues along a Laffer curve

Name: At tax rates higher than the tax rate that maximizes tax revenues along a Laffer curve
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The Laffer curve illustrates the relationship between tax rates and tax revenue, suggesting that there is an optimal tax rate that maximizes revenue. At tax rates higher than this optimal point, reducing tax rates can actually increase tax revenues by encouraging more economic activity and thus expanding the tax base.

At Tax Rates Higher Than the Tax Rate That Maximizes