Taxes, revenues, and the “Laffer curve”
As Arthur Laffer has noted, “There are always two tax rates that yield the same revenues.” When an aide to President Gerald Ford asked him once to elaborate, Laffer (who is Professor of Business Economies at the University of Southern California) drew a simple curve, shown on the next page, to illustrate his point. The point, too, is simple enough though, like so many simple points, it is also powerful in its implications.