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¦ noun Economics a supposed relationship between economic activity and the rate of taxation which suggests that there is an optimum tax rate which maximizes revenue.
Origin
1970s: named after the American economist Arthur Laffer.
In economics, the Laffer curve illustrates a theoretical relationship between rates of taxation and the resulting levels of the government's tax revenue. The Laffer curve assumes that no tax revenue is raised at the extreme tax rates of 0% and 100%, and that there is a tax rate between 0% and 100% that maximizes government tax revenue.
1. So the flat taxers then deploy the Laffer curve (a back–of–the–envelope job from Arthur Laffer, an economist much lauded in the Reagan White House) and claim that cutting taxes will make us all work harder, earn more and – eventually – boost the Treasury‘s take.