Laffer Curve Calculator

✖The Tax Rate is the ratio (usually expressed as a percentage) at which a business or person is taxed.ⓘ Tax Rate [tax]			+10% -10%
✖Taxable Base refers to the portion of an individual's or entity's income, profit, property value, or other financial measure that is subject to taxation by the government.ⓘ Taxable Base [Tb]			+10% -10%

✖Revenue is the income that a business has from its normal business activities, generally from the sale of goods and services to customers.ⓘ Laffer Curve [R]

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Formula

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Laffer Curve

Formula

`"R" = "tax"*"Tb"`

Example

`"128000"="8"*"16000"`

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Laffer Curve Solution

STEP 0: Pre-Calculation Summary

Formula Used

Revenue = Tax Rate*Taxable Base
R = tax*Tb
This formula uses 3 Variables

Variables Used

Revenue - Revenue is the income that a business has from its normal business activities, generally from the sale of goods and services to customers.
Tax Rate - The Tax Rate is the ratio (usually expressed as a percentage) at which a business or person is taxed.
Taxable Base - Taxable Base refers to the portion of an individual's or entity's income, profit, property value, or other financial measure that is subject to taxation by the government.

STEP 1: Convert Input(s) to Base Unit

Tax Rate: 8 --> No Conversion Required
Taxable Base: 16000 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

R = tax*Tb --> 8*16000

Evaluating ... ...

R = 128000

STEP 3: Convert Result to Output's Unit

128000 --> No Conversion Required

FINAL ANSWER

128000 <-- Revenue

(Calculation completed in 00.005 seconds)

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Created by Kashish Arora

Satyawati College (DU), New Delhi

Kashish Arora has created this Calculator and 50+ more calculators!

Verified by Vishnu K

BMS College of Engineering (BMSCE), Bangalore

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< 18 Public Finance Calculators

Cost Benefit Analysis

Go Benefit Cost Ratio = (sum(x,0,Number of Periods,(Cash Flow of Benefits/(1+(0.01*Discount Rate))^x)))/(sum(x,0,Number of Periods,(Cash Flow of Costs/(1+(0.01*Discount Rate))^x)))

Marginal Propensity to Consume

Go Marginal Propensity to Consume = Consumption/(Disposable Income*(Revenue-Tax Imposed))

Tax Incidence for Customers

Go Tax Incidence = 100*(Elasticity of Supply/(Elasticity of Demand+Elasticity of Supply))

Tax Incidence for Producers

Go Tax Incidence = 100*(Elasticity of Demand/(Elasticity of Demand+Elasticity of Supply))

Tax Burden for Customers

Go Tax Burden = Elasticity of Supply/(Elasticity of Demand+Elasticity of Supply)

Tax Burden for Suppliers

Go Tax Burden = Elasticity of Demand/(Elasticity of Demand+Elasticity of Supply)

Budget Balance

Go Budget Balance = Tax Revenue-Government Consumption-Transfer Payments

Tax Multiplier

Go Tax Multiplier = ((1-Marginal Propensity to Consume)/Marginal Propensity to Save)

Tax Elasticity

Go Tax Elasticity = Change in Tax Revenue/Change in Economic Activity

Marginal Tax Rate

Go Marginal Tax Rate = Change in Taxes Paid/Change in Taxable Income

Marginal Propensity to Save

Go Marginal Propensity to Save = Change in Savings/Change in Income

Debt to GDP Ratio

Go Debt to Gdp = Total Debt of Country/Gross Domestic Product (GDP)

Budget Deficit

Go Budget Deficit = Government Expenditure-Government Income

Tax Buoyancy

Go Tax Buoyancy = Change in Tax Revenue/Change in GDP

Average Tax Rate

Go Average Tax Rate = Tax Paid/Net Income

Tax Liability

Go Tax Liability = Tax Base*0.01*Tax Rate

Tax Revenue

Go Tax Revenue = Tax Liability*Taxpayer

Laffer Curve

Go Revenue = Tax Rate*Taxable Base

Laffer Curve Formula

Revenue = Tax Rate*Taxable Base
R = tax*Tb

What is Laffer Curve?

The Laffer Curve is a theoretical concept in economics that suggests there is an optimal tax rate that maximizes government revenue. The curve illustrates the relationship between tax rates and tax revenue, suggesting that at low tax rates, increasing tax rates will lead to higher revenue, but at some point, further increases in tax rates will lead to a decrease in revenue due to disincentives to work, invest, or engage in economic activity.

The Laffer Curve itself is not represented by a specific formula, but it's often depicted graphically, with tax revenue on the vertical axis and the tax rate on the horizontal axis.
However, the Laffer Curve concept can be applied in a general sense using mathematical equations to model the relationship between tax rates and tax revenue.

How to Calculate Laffer Curve?

Laffer Curve calculator uses Revenue = Tax Rate*Taxable Base to calculate the Revenue, The Laffer Curve formula visually shows the relationship between tax rates and the amount of tax revenue collected by governments. Revenue is denoted by R symbol.

How to calculate Laffer Curve using this online calculator? To use this online calculator for Laffer Curve, enter Tax Rate (tax) & Taxable Base (Tb) and hit the calculate button. Here is how the Laffer Curve calculation can be explained with given input values -> 128000 = 8*16000.

FAQ

What is Laffer Curve?

The Laffer Curve formula visually shows the relationship between tax rates and the amount of tax revenue collected by governments and is represented as R = tax*Tb or Revenue = Tax Rate*Taxable Base. The Tax Rate is the ratio (usually expressed as a percentage) at which a business or person is taxed & Taxable Base refers to the portion of an individual's or entity's income, profit, property value, or other financial measure that is subject to taxation by the government.

How to calculate Laffer Curve?

The Laffer Curve formula visually shows the relationship between tax rates and the amount of tax revenue collected by governments is calculated using Revenue = Tax Rate*Taxable Base. To calculate Laffer Curve, you need Tax Rate (tax) & Taxable Base (Tb). With our tool, you need to enter the respective value for Tax Rate & Taxable Base and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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