Investor Glossary-laffer curveInvestor Glossary-laffer curveInvestor Glossary-laffer curveInvestor Glossary-laffer curveInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Laffer Curve

The HTML to link to this page
 

The Laffer Curve is a mathematical shape that shows the relationship between tax rates and the revenue governments collect from those taxes. The Laffer Curve is shaped like an upside down U. The Laffer Curve is not fixed, however. The Laffer Curve shows that as tax rates rise, tax revenues increase. They reach a critical high point, called T*, where the maximum amount of tax revenue is reached for the maximum tax rates possible. After this point, both tax rates and revenue drop. The T* location suggests that at this point, people become increasingly unwilling to pay taxes. The location of the T* point along the Laffer Curve varies according to economic conditions. Economist Arthur Laffer invented the Laffer Curve.



Rate this Laffer Curve definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: reverse mortgage, current ratio, phantom income, APR, limit order, class C shares, labor relations, diluted share, covered put, dividends payable, debt service coverage, option premium, per diem, irrevocable trust, stock split, inflation, cancelled check, risk management, required rate of return, 1035 exchange, FICO score, 144a, minority interest, Key Rate Duration, average price per share, deferred revenue, liquidity ratio, command economy, annual return, LIBOR, quality assurance, VIX, ex-dividend, ex-dividend date, open position, in escrow, wholly-owned subsidiary, EBITDA, implied volatility, retained earnings, balance sheet, deferred tax, margin rate, 1031 exchange, Zero Cost Collar, FTSE, stock market close, 401a, real GDP


Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
Investor Glossary Index >>> # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
©2004-2014 Investor Glossary - All rights reserved - Terms of Use