Read the following two articles http://www.laffercenter.com/the-laffer-center-2/the-laffer-curve/ http://www.heritage.org/research/reports/2004/06/the-laffer-curve-past-present-and-future Using your knowledge of after-tax engineering economic analysis on a companys investment decisions and the information in the articles relate how taxes can affect investment decisions. The Laffer curve basically relates how a 5% increase in a tax rate does not necessarily increase the taxing agencys revenue 5%, it may even decrease the total revenue due to the interaction of arithmetic (5% increase) and economic factors (a higher effective price will decrease economic activity). A simplistic explanation is that the tax increase may be 5 % of economic activity, but that tax increase reduces that economic activity due to a higher effective price of goods and services, so the 5% increase taxes a lower base revenue. And that lower base revenue is caused by the higher tax rate. Write a two-page paper on your analysis of the articles and their possible effects on private investment versus government revenue. You may restrict your analysis to Federal taxes only. Keep in mind, this is economic theory only and, as such, can not be definitely proved or disproved. There are other opinions on the matter and you are encouraged to explore alternate views. One area that might prove useful in an analysis of the Laffer Curve could be the tax increases recently put in place by the states of Connecticut and Maryland. Have the increased tax rates of those states decreased economic activity in those states? The upcoming Congress is also said to be considering reducing the Corporate Income Tax Rate from 35% to 15%, which uses the logic of the Laffer Curve as an argument. Make sure you reference any outside work you use in your paper.

Read the following two articles
http://www.laffercenter.com/the-laffer-center-2/the-laffer-curve/

http://www.heritage.org/research/reports/2004/06/the-laffer-curve-past-present-and-future

Using your knowledge of after-tax engineering economic analysis on a companys investment decisions and the information in the articles relate how taxes can affect investment decisions. The Laffer curve basically relates how a 5% increase in a tax rate does not necessarily increase the taxing agencys revenue 5%, it may even decrease the total revenue due to the interaction of arithmetic (5% increase) and economic factors (a higher effective price will decrease economic activity). A simplistic explanation is that the tax increase may be 5 % of economic activity, but that tax increase reduces that economic activity due to a higher effective price of goods and services, so the 5% increase taxes a lower base revenue. And that lower base revenue is caused by the higher tax rate.
Write a two-page paper on your analysis of the articles and their possible effects on private investment versus government revenue. You may restrict your analysis to Federal taxes only. Keep in mind, this is economic theory only and, as such, can not be definitely proved or disproved. There are other opinions on the matter and you are encouraged to explore alternate views. One area that might prove useful in an analysis of the Laffer Curve could be the tax increases recently put in place by the states of Connecticut and Maryland. Have the increased tax rates of those states decreased economic activity in those states? The upcoming Congress is also said to be considering reducing the Corporate Income Tax Rate from 35% to 15%, which uses the logic of the Laffer Curve as an argument. Make sure you reference any outside work you use in your paper.