Last December marked the 40th anniversary of the Laffer curve—sort of. Sometime around the week of Dec. 2, 1974, at the Two Continents restaurant at the Hotel Washington, there on Pennsylvania Avenue just as that thoroughfare tries to force its way northwest into the Rose Garden, economist Arthur B. Laffer scrawled a parabola on a napkin. The little graph showed that when tax rates go up, they hit a peak in terms of receipts. At some point, an increase in tax rates brings a decrease in receipts.
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