The idea of cutting tax rates to spur business comes from the economist behind Ronald Reagan’s ‘Reaganomics’ tax cuts, Arthur Laffer… The Laffer Curve delivers a simple, seemingly obvious message: When the tax rate is zero percent, government will collect nothing from the earnings it taxes. When the tax rate is 100 percent, the curve also shows the government collecting zero revenue because there will presumably be no earnings: who would work if they kept absolutely none of what they earned?

What It Means

This is a placeholder explanation generated by the low-overhead model. It interprets "The idea of cutting tax rates to spur business comes from the economist behind Ronald Reagan’s ‘Reaganomics’ tax cuts, Arthur Laffer… The Laffer Curve delivers a simple, seemingly obvious message: When the tax rate is zero percent, government will collect nothing from the earnings it taxes. When the tax rate is 100 percent, the curve also shows the government collecting zero revenue because there will presumably be no earnings: who would work if they kept absolutely none of what they earned?" in the context of "Paul Solman “How Low Can They Go? Arthur Laffer Defends Slashing State Income Taxes”, PBS News Hour (Aug. 1, 2013)" to mean that wisdom is timeless.