If you observe a Laffer's Curve........?

Question

when you reach 100% which is on the far right of the curve it is said that all of people's earnings would go to the government but it seems as the further right you go on the curve the governments tax revenue gets lower
http://www.answers.com/topic/laffer-curve

so how is the revenue going to the government

Answer 1

I think you have answered your own question without even realizing it. The Laffer curve states that if tax rates rise beyond a magic point, tax revenue begins to fall. We do not know exactly where this point is, it is most likely different for different people.

To use an extreme example, lets us assume that tax rates are 100%, meaning ALL of you income goes to the government in taxes. Why bother getting out of bed at all? I would rather sit home and watch Oprah than work. Either way, my after-tax income is zero.

Hope this helps.

Answer 2

You are correct, sir.

Answer 3

yes.