SK: Thanks for pointing out that revenues contain more variables than simply a tax rate(s). If spending were fixed and we don’t complicate the issue by factoring in inflation, population growth, business cycle, environmental costs, etc. the premise holds.

If someone or company keeps more of the money they make ie. smaller tax liability, they will spend it– creating a taxable event!

It is really human nature and Laffer did a great job illustrating it. If the politicians can keep their hands off the checkbook under a lower tax rate, revenues will increase.