Meaning & use
Laffer curve
Last updated
Meaning
nouncountable
A theoretical graph showing that increasing tax rates raises government revenue only up to a certain point, after which higher rates reduce revenue.
Grammar: Countable; use 'a' or 'the' when referring to the concept: 'the Laffer curve suggests...'
Patterns
- the Laffer curve suggests
- on the Laffer curve
- the Laffer curve effect
According to the Laffer curve, cutting taxes from a very high level might actually increase government income.
The economist drew a Laffer curve on the board to show why extremely high tax rates can backfire.
Politicians often cite the Laffer curve when arguing for tax cuts, but the exact shape is debated.
Word forms
| plural | Laffer curves |
|---|
Common combinations
- the Laffer curve suggests
- The Laffer curve suggests that there is an optimal tax rate that maximizes revenue.
- on the Laffer curve
- The current tax rate is somewhere on the left side of the Laffer curve.
- the Laffer curve effect
- Some economists doubt that the Laffer curve effect is strong enough to matter in practice.
- draw a Laffer curve
- In his lecture, the professor drew a Laffer curve to illustrate the concept.
- the logic of the Laffer curve
- The logic of the Laffer curve is simple: at a 100% tax rate, no one would work.
Synonyms and how they differ
- tax revenue curve
- A more general term for any graph showing how tax income changes with rates; the Laffer curve is a specific theoretical example.
Word family
- Laffer proper noun
- The surname of economist Arthur Laffer, after whom the curve is named.
Commonly confused: Laffer curve or Laffer curve vs. Lorenz curve?
Laffer curve vs Laffer curve vs. Lorenz curve
The Lorenz curve shows income distribution, not tax revenue; they are different economic graphs.
Practice
Which sentence uses 'Laffer curve' correctly?
Choose one answer.
The Laffer curve is about the relationship between tax rates and revenue, not income distribution, precise forecasting, or unemployment. Option B correctly describes its main idea. Option A confuses it with the Lorenz curve; option C overstates its precision; option D is unrelated.
Make it your own
Write a sentence using “Laffer curve”, then check it and compare it with the examples above.