Laffer curve

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Laf·fer curve

or Laf·fer Curve  (lăf′ər)
A curved graph that illustrates the theory that, if tax rates rise beyond a certain level, they discourage economic growth, thereby reducing government revenues.

[After Arthur Laffer (born 1940), American economist.]

Laffer curve

(Economics) economics a curve on a graph showing government tax revenue plotted against percentage tax rates. It has been used to show that a cut in a high tax rate can increase government revenue
[C20: named after Arthur Laffer (born 1940), US economist]
ThesaurusAntonymsRelated WordsSynonymsLegend:
Noun1.Laffer curve - a graph purporting to show the relation between tax rates and government income; income increases as tax rates increase up to an optimum beyond which income declines
graph, graphical record - a visual representation of the relations between certain quantities plotted with reference to a set of axes
References in periodicals archive ?
Because changes in tax policy affect taxpayers' incentives in a variety of ways, including their desire to work and save and their decisions to report taxable income, one crucial modeling assumption in this exercise is the assumed taxable income elasticity (ETI).
The taxable income elasticity of high-income taxpayers: Evidence from a long panel, Retrieved from http://papers.
taxable income elasticity literature has focused on the 1980s tax cuts.
2) Note, though, that (as has been argued in the taxable income elasticity literature, including my own work) both avoidance and wealth accumulation channels entail similar short-term efficiency costs, although the longer-term implications are likely very different.
Goolsbee reviews the impact of the taxable income elasticity research that has become so prevalent, and he identifies areas where the research could be improved.