Robert Mundell stated that, as long as the economy grows faster and produces more revenue than predicted by assuming no behavioral change, then the government could lower the tax rate safely even though the aggregate revenue immediately declines if t
Robert Mundell stated that, as long as the economy grows faster and produces more revenue than predicted by assuming no behavioral change, then the government could lower the tax rate safely even though the aggregate revenue immediately declines if the government is in a high range of the tax rate. The basis for Mundell's argument was this economic construct, which relies on the understanding that productivity and the amount of work a laborer invests are not necessarily correlated. FTP, identify this famous economic curve which shows that there are two tax rates that yield the same revenues.
Robert Mundell stated that, as long as the economy grows faster and produces more revenue than predicted by assuming no behavioral change, then the government could lower the tax rate safely even though the aggregate revenue immediately declines if the government is in a high range of the tax rate.
{Laffer} curve