LAFFER CURVE: The graphical inverted-U relation between tax rates and total tax collections by government. Developed by economist Arthur Laffer, the Laffer curve formed a key theoretical foundation for supply-side economics of President Reagan during the 1980s. It is based on the notion that government collects zero revenue if the tax rate is 0% and if the tax rate is 100%. At a 100% tax rate no one has the incentive to work, produce, and earn income, so there is no income to tax. As such, the optimum tax rate, in which government revenue is maximized, lies somewhere between 0% and 100%. This generates a curve shaped like and inverted U, rising from zero to a peak, then falling back to zero. If the economy is operating to the right of the peak, then government revenue can be increased by decreasing the tax rate. This was used to justify supply-side economic policies during the Reagan Administration, especially the Economic Recovery Tax Act of 1981 (Kemp-Roth Act).

     See also | taxes | supply-side economics | Kemp-Roth Act | income tax | conservative |

LAFFER CURVE, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2024. [Accessed: October 21, 2024].

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Ceteris paribus factors, other than aggregate income or production, that are held constant when the net exports line is constructed and which cause the net exports line to shift when they change. Some of the more important net exports determinants are global economic conditions, exchange rates, and trade barriers.

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Today, you are likely to spend a great deal of time waiting for visits from door-to-door solicitors trying to buy either a wall poster commemorating last Friday (you know why) or a country wreathe. Be on the lookout for strangers with large satchels of used undergarments.
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