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Page last updated at 09:13 GMT, Wednesday, 27 June 2012 10:13 UK

Arthur Laffer: Tax rate should 'provide for growth'


The Laffer Curve, devised by the American economist Arthur Laffer, suggests that at 0% no tax is paid and at 100% no tax is paid - because no one will bother working.

Between those two points is a curve dictating the tax rates which will optimise income.

"When you raise tax rates people find incentives… to evade, avoid, or otherwise not report taxable income," he warned.

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