Where Does the Laffer Curve Bend?

For the economics geek in all of us.

With the Bush tax cuts due to expire soon and debates about raising top rates further to cut the budget deficit soon to follow, the Laffer curve is bound to come up again. The idea, popularized by economist Arthur Laffer and writer Jude Wanninski in the 1970s and ‘80s, is simple. Tax rates of zero percent produce no revenue, for obvious reasons. Rates of 100 percent should produce no revenue either, as no one would bother making the money that falls into that bracket knowing it would all be taken away. Thus, presumably, there is some rate in between the two that maximizes revenue.

Mr. Klein goes on to ask various economists, tax experts, and politicians where that point is.

Via Greg Mankiw, whose opinion is included.