The Laffer Curve

​We can use line charts to show the relationship between two variables. One such line chart is Laffer chart invented by economist Arthur Laffer to explain the relationship between income tax rate and tax revenues.


The shape of the famous curve (#famouschart, #linechart) illustrates that the government's tax revenue with not grow as the tax rate increases. This is because a high tax rate will discourage people from working, thus causing less tax revenue. The curve argues that governments should find the tax rate where the tax revenue is maximized. 

Next time, you can use the trend curve to show that revenue growth suffers due to the customers' incentive decreases.