Where Is the Peak of the Laffer Curve?

43098708.xls





If the peak of the long-run Laffer curve happened to be at a top rate of 40%--and thus an average tax rate of 25%--the graph to the right, plotting average tax rates against revenues for the OECD countries, would show a peak at an x-axis value of 25%. It doesn't. If you squint you can convince yourself that there is some curvature to the graph, but the squinting has to be really, really hard. If revenues actually dropped off when top rates went above 40%--or 15%, or 19%, or 33%, or even...

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Published on August 09, 2010 20:59
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