Ex: Tax cuts
Laffer Curve: Theoretical relationship between tax rate and government revenues.
Criticisms of the Laffer Curve:
1) Impossible evidence suggests that the impact of tax rates on incentives to work, save, and invest are small.
2) Tax cuts also increase demand which can fuel inflation.
3) Where the economy is actually located on the curve is difficult to determine.
VIDEO:
No comments:
Post a Comment