Visual Representation of Laffer Curve Factoring in Implications of Capital Outflow

Maria O. Kakaulina

Journal of Tax Reform, 2017, vol. 3, issue 2, 103-114

Abstract: The article examines the problem of Laffer curve visualization. The purpose of the article is to propose a visual representation of the curve that takes into account the effects of capital outflow. The following research methods were used in the course of the research: historical method, comparative and critical analysis, graphical method. The author analyzes existing methods of the graphical representation of the curve drawin upon the interpretation of the original theoretical assumptions used for building a coordinate plane and taking into account additional factors (inflation, underground economy etc.). The author defines conditions for capital outflow and, as a result, for tax migration. The author proposes her own interpretation of the term “tax migration”, listing the key reasons for its occurrence. A variant of Laffer curve visualization in different coordinate planes has been developed, factoring in tax migration. The obtained results made it possible to establish a range of permissible changes to tax rates within which government tax revenue increases. The time frame in which tax revenue grows is different, depending on the dynamics of the tax rates.

Keywords: Laffer curve; tax burden; tax revenue; tax migration; capital outflow; open economy; tax resident; graphical interpretation; income effect; substitution effect; tax “hysteresis” (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://jtr.urfu.ru/fileadmin/user_upload/site_15907/main/Kakaulina__1_.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aiy:jnljtr:v:3:y:2017:i:2:p:103-114

DOI: 10.15826/jtr.2017.3.2.034

Access Statistics for this article

Journal of Tax Reform is currently edited by Igor Mayburov

More articles in Journal of Tax Reform from Graduate School of Economics and Management, Ural Federal University Contact information at EDIRC.
Bibliographic data for series maintained by Natalia Starodubets ().