Definition of Laffer curve in US English:

Laffer curve

noun

Economics
  • A supposed relationship between economic activity and the rate of taxation that suggests the existence of an optimum tax rate that maximizes tax revenue.

    • ‘People and businesses can move from state to state or city to city in response to varying tax rates, but US discussions of the Laffer curve have not factored this mobility into the equation.’
    • ‘Another area where the 1990s have proved supportive of progressive economics concerns supply-side economics and the Laffer curve.’
    • ‘Changes in tax rates shift the Laffer curves of competing tax jurisdictions.’
    • ‘The theory of supply side economics and the Laffer curve drove federal marginal tax rates from 91% in 1963 down to 28% when Ronald Reagan left office.’
    • ‘The mechanism must be as foolproof as the Laffer curve, which tells you that as you reduce tax rates, the tax yield increases and approaches a maximum.’

Origin

1970s: named after Arthur Laffer (born 1942), American economist.

Pronunciation

Laffer curve

/ˈlafər ˌkərv/