The Laffer Curve gets discussed a lot when TV talking heads discuss tax law. Republicans like the Laffer Curve; Democrats don't like it. The Laffer Curve is a fairly simple concept that is obviously true. If a state charges a 0% tax rate, then no revenue will be raised. And, if the state charges a 100% tax rate then revenue will soon dry up since no one has an incentive to work. The optimum tax rate for revenue generation is someplace between the two extremes, but that place is not well defined. States have a tendancy to charge too high a rate, and so revenue can be increased by reducing the rate. It may take a while for the tax to increase since the revenue increase is due to an increase in economic growth. No one know what the maxic rate that produces the most revenue is, but so far in the US reducing the tax rate has increased revenue. This has also been the experience in other countries that reduced taxes. Ireland and Eastern European countries are recent example. According to the 9 April issue of Forbes, Iceland is also an example. From 1991 to2001 Iceland reduced the Corporate tax rate from 45%. Personal tax rates were cut from 33% to 22.75%. From 1991 to 2001 revenue increased by a factor of 3, and from 2001 to 2006 revenues tripled again. As far as I can tell Democrats in the US don't dispute that reducing tax rates increases income, but they are interested in social engineering to equalize income rather than to increase the size of the economy and to increase government revenue. My own experience is that the social engineering is a bad idea. When I was a boy everyone was more nearly economically equal: we were all equally bad off economically. I've always thought it is a better idea to create more pie than to concentrate on making certain that everyone gets an equal share of the existing pie. Collectivists and a lot of other people view life as a zero sum game where some people gain at the expense of others. That does happen, but it is clear that life is not a zero sum game; just consider the wealth of the US in 1936 and today.