Macro-Economics: Optimum tax rate on the Laffer Curve?

B

BritishMale

New member
I've come up with a method, but I'm not quite sure if it is correct because I'm just a student and it's not written everywhere. However:

If you broke down all the income groups into smaller segments (i.e. every $5000 PA), and worked out the average curve on the Backward Bending Supply for Labour curve, then put that ON the laffer curve, surely the points at which the two intersect would be the optimum tax rate? Let me know. Thanks
 
Because you are looking at non linear behavior you can not use averages even if you are averaging oven similar incomes. Where someones labor supply curve becomes backward bending depend more on individual preferences than income level.
Economist have looked and international comparison and estimate it occurs at a tax rate of about 70%
 
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