|
|
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).
Visit the GLOSS*arama
|
|
|
|
|
TAXATION BASICS Taxes are mandatory payments from members of society to governments. The total tax revenue collected from a specific tax can be identified as the product of the tax rate times the tax base. The tax base can be specified as either a physical quantity or monetary value, giving rise to two types of tax per unit tax (quantity) and ad valorem tax (value). In some cases it is useful to specify a tax rate as an average tax rate and in other cases as a marginal tax rate.
Complete Entry | Visit the WEB*pedia |
|
|
BLUE PLACIDOLA
[What's This?]
Today, you are likely to spend a great deal of time searching the newspaper want ads seeking to buy either any book written by Stephan King or a T-shirt commemorating next Thursday. Be on the lookout for vindictive digital clocks with revenge on their minds.
Your Complete Scope
This isn't me! What am I?
|
|
|
A lump of pure gold the size of a matchbox can be flattened into a sheet the size of a tennis court!
|
|
|
"The only profit center is the customer. " -- Peter Drucker, management consultant
|
|
APR
Annual Percentage Rate
|
|
|
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.
User Feedback
|
|
