The Laffer Curve Is No Longer a Punch Line: Allison Schrager

For years it was a punch line. Now the Laffer Curve — which purports to show that tax cuts can increase revenue — is making a kind of comeback. This time around, it is providing more of an intellectual than a policy framework, but that is a useful role as some states and city governments appear eager to test the proposition that no tax is too high.

Famously (or infamously?) drawn on a napkin by the economist Art Laffer in 1974, the Laffer Curve is a concave shape plotting the relationship between tax revenues and the tax rate. It shows ...