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You are here : Home » Fiscal Files » The Laffer Curve
 
The Laffer Curve

The tale tells that Arthur B. Laffer sketched his famous curve on a napkin during a lunch with Jude Wanniski, Donald Rumsfeld and Dick Cheney. At that time, he surely did not imagine the renown that will follow this day of December 1974.

The Laffer curve relates for each tax rate the expected total tax revenues. For low rates, tax rate and tax revenues move in the same way. But, as rates increase, this relation works in the opposite direction: higher tax rate produces smaller tax revenues. Hence, beyond this "maximum tax rate" the disincentive" effect of taxation is overwhelming. Nonetheless, this maximum rate is not empirically defined: it depends on place, time, circumstances, etc. 

The following file does not pretend to be exhaustive. Its goal is to introduce key arguments about Laffer Curve.



Introduction/Definitions


Laffer Curve: quick definition by Investopedia.com

Laffer Curve: quick definition by amosweb.com

Laffer Curve: detailed definition by wikipedia.org

Laffer Curve and context in US history by encyclopedia.thefreedictionary.com

Arthur B. Laffer: professional biography by Barber & Associates

Arthur B. Laffer: professional biography by The Club For Growth.org

Anecdote: Laffer's ability to present his ideas simply by Online Learning Center

The General Concept of Supply-Side Economics by Jude Wanniski (pdf)


 

Fiscal Analysis

"Bread, Circuses, Tax Cuts, and Debt" by Robert P. MUrphy (Ludwig von Mises Institute - November 5, 2004)

"The Laffer Curve: Past, Present, and Future" by Arthur B. Laffer (The Heritage Foundation - June 1, 2004 - pdf)

"Public Spending, Transfers and the Laffer Curve" by Zsolt Becsi (Federal Reserve Bank of Atlanta & Louisiana State University, April, 2002 - pdf)

"Revenue Maximizing Taxation is Not Optimal" by Jim Saxton (Joint Economic Committee, United States Congress - July, 1997 - pdf)

"Taxes, Revenues, and the "Laffer Curve" by Jude Wannisky (The Wall Street Journal - June, 1978)

"Taxes and Growth" (National Center for Policy Analysis)


 

 

Studies & Mathematical Modelling

"Corporate Governance and Taxation" by Mihir A. Desai, Alexander Dyck, & Luigi Zingales (Princeton.edu, 2003 - pdf)

"Why Fairness Matters: A New Look at the Laffer Curve and the Displacement Loss From Tax Evasion" by Filip Palda (Ecola Nationale d'Administration Publique, Montreal, Québec - August, 2001 - pdf)

"On Analytics of the Dynamic Laffer Curve" by Jonas Agell & Mats Persson (Seminar Paper, Institute for International Economic Studies, April, 2000 - pdf)

"Evidence on the high-income Laffer curve from six decades of tax reform" by Austan Goolsbee (University of Chicago, September, 1999 - pdf)

"Green Tax Refrom and the Laffer curve in labour market models: A brief note" by Thomas Ziesemer (MERIT, 2003 - pdf)

"Explorations of the Laffer Curve" by Hans G. Monissen (University of Wuerzburg Sanderring 2)

"Explosive hyperinflation, inflation tax Laffer curve and modeling the use of money" by Maria-José Gutiérrez & Jesus Vasquez (pdf)


 

News

"Private Client: Back to the simple life" by Siman Mabey (legalweek.net, November 25, 2004)

""Voodoo economics" in Africa" by Helmo Preuss (business.iafrica.com, November 10, 2004)

"Business joy at Bush re-election proves fragile" by Ian Fraser & Ken Symon (Sunday Herald online, November 07, 2004)

"John Kerry's Confusion" by Tom Nugent (National Review Online - February 3, 2004)

"The Laffer Curve works" by Bruce Bartlett (Townhall.com - September 26, 2003)

"A Laffer for Russia" by Bruce Bartlett (National Review Online - April 15, 2002)


 

Opinions

"India swings on the Laffer curve" by Jude Wanniski (english.aljazeera.net - March 07, 2005)

"Revisiting and Expanding the Laffer Curve" by Tibor R. Machan (strike-the-root.com - March 18, 2004)

"You must be having a Laffer" by Richard Adams (guardian.co.uk - January 22, 2004)

"Dear Dr. Dollar" by Judith Walker (dollar & sense .org, December, 2003)

"Laffer's Laugher" by Bill Mann (humour on www.fool.com)


 

Books & Articles

Supply Side Tax Policy: Its Relevance to Developing Countries by Ved P. Gandhi, 1988, International Monetary Fund, ISBN 0939934914

"Politics, Time, and the Laffer Curve" by James M. Buchanan & Dwight R. Lee, Journal of Political Economy, August 1982, volume 90, Issue 4, pp. 816-819.


Website

http://www.polyconomics.com/

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

»  The Laffer Curve
Flat Tax
Ricardian Equivalence
The Tobin Tax
Tax Havens
Tax Competition
History of taxation

See Center for Freedom and Prosperity's videos on the Laffer curve






 
 
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