What are the important implications of the Laffer curve?

The most important implication of laffer curve is that too much increase in tax rates beyond a certain point will be counter productive to the tax revenues earned by the Government.You can read about the Taxation System in India – Types, GST, VAT, Objectives, Limitation, Laffer Curve in the given link.

The Laffer curve implies that the best tax revenue can be earned when the tax rate is at optimal value represented in the Laffer curve. In the 1980s the Laffer curve was used for implementing tax cuts in the US.

Further readings:

  1. Global Minimum Corporate Tax – Minimum tax rate proposed by the G7
  2. Base Erosion and Profit Sharing – Strategies used by Multinational Companies

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