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LAFFER CURVE Definition & Legal Meaning

Definition & Citations:

Conceptual relationship between marginal tax rates and total tax collections in a graphical representation named after US economics professor Arthur Laffer. He proposed that lower taxes encourage greater output and supply, increasing aggregate income. Supply-side economics supporter use the Laffer curve as the basis of their claim that policies for low income tax leads to new investments that lead to non-inflationary growth.

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