Familiar with the Laffer Curve?:

“The Laffer curve, a mound-shaped indicator, was designed to find the ‘ideal’ tax rate that would help the government, as well as the people it serves, prosper.

“The idea is credited to economist Dr. Arthur Laffer….

“The Laffer Curve is a tax theory suggesting an inverted U-shaped relationship between tax rates and the amount of tax revenue collected by governments.

“The ideal, or optimal, rate of taxation for an economy is the one that falls right at the top of the inverted U.

“The theory argues if tax rates are too high they will discourage taxed activities, like consumption and investment, while rates that are too low fail to generate sufficient revenue.”

Like anything that makes sense – the Laffer Curve is predicated upon human nature. (more…)