sparcboy Wrote:
Nov 28, 2012 8:27 AM
"Laffer assumes that the government would collect no income tax at a 100% tax rate because there would be no incentive to earn income. Research has shown that it is possible for a Laffer curve to continuously slope upwards all the way to 100%.[7] Additionally, the Laffer curve depends on the assumption that tax revenue is used to provide a public good that is separable in utility and separate from labor supply, which may not be true in practice.[8] The Laffer curve is also too simplistic in that it assumes a single tax rate and a single labor supply. Actual systems of public finance are more complex. (continued below...)