Optimal tax the optimum. Stipulating this condition results in the following formula for the optimal top tax rate, if incomes are Pareto distributed: formula_1 where: Empirical estimation of the parameters of this equation suggests that the revenue-maximising top tax rate is between approximately 50% and 80%, although this estimate neglects long-run behavioural responses, which would imply higher elasticities and a lower optimal tax rate. Saez's analysis can also be generalised to tax rates other than the top rate. In the late 1970s, Arthur Laffer developed the Laffer curve, which demonstrates that there are two effects of changing tax rates: an arithmetic effect—if
Larry Laffer person's full name as a comical reference, "Jerry" was then altered to "Larry", a similar name, in honor of injury attorney Larry H. Parker, a childhood friend of Lowe. Lowe had to find a new surname, and having in mind the many L-words of the title, skimmed through the 'L' volume of an encyclopedia in order to find a suitable word or name. He fell on the entry of Arthur Laffer, and the name caught his attention due to its phonetic resemblance to 'laugher'. Arthur Laffer for years had no idea about the existence of the games until much later