The Laffer curve argues that increasing tax rates

A) above a certain point actually decreases total tax revenues.
B) is the best method to reduce the federal deficit.
C) above a certain point actually encourages productive investments.
D) up to a certain point is necessary for economic justice.

Laffer Curve

A theoretical representation showing the relationship between tax rates and the amount of tax revenue collected by governments.

Tax Revenues

The income that is gained by governments through taxation.

Federal Deficit

The financial condition that occurs when the government's expenditures exceed its revenues in a given fiscal year.