As the size of a tax increases, the government's tax revenue rises, then falls.

Name: As the size of a tax increases, the government's tax revenue rises, then falls.
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This phenomenon is described by the Laffer Curve, which illustrates that there is an optimal tax rate that maximizes revenue. Beyond this point, increasing tax rates can actually lead to a decrease in total tax revenue, as higher taxes can discourage economic activity and tax compliance.

As the Size of a Tax Increases, the Government's Tax