In 1979 in the UK, the marginal rate of income tax charged on the highest earners was 83%, rising to 98% when income came from interest or dividends. By 1989, that top marginal rate had been cut to 40%. Even so, the tax revenue collected from the highest earners rose significantly. Which theoretical concept shows this link between tax rates and tax revenue?
- Athe J curve
- Bthe Laffer curve
- Cthe Marshall-Lerner condition
- Dthe Phillips curve