Evaluating Progressive Income Taxes

What does the Laffer curve demonstrate the relationship between?

• Tax rate and government tax revenue

• Government spending and tax revenue

• Interest rates and savings

• Inflation and economic growth

According to those against high tax rates (ie strong progressive taxation), they believe that this ​ (a)   will disincentive successful ​ (b)   from investing in the country for growth.

• government intervention
• free market policy
• business people
• low income families

At what tax rate does the Laffer curve theory suggest that a nation's total tax receipts are maximized?

Why do supply-siders advocate for lower income and corporate taxes?

• To increase the supply of labor and capital

• To decrease economic activity

• To reduce government efficiency

• To limit national output

​ Which are arguments for and against progressive / high tax rates?

• Against

• They allow governments to tax the high income more

• For

• They allow a better distribution of income

• Against

• They actually lead to lower overall government tax revenue

• Against

• They disincentivize the labour marker

• For

• Lower tax rates may actually provide more government revenue