Funding the Future The Laffer lie
Mar 15, 2026
A critique of Arthur Laffer’s famous tax curve and how a simple sketch reshaped economic policy. Examination of why the curve lacks empirical support and how real-world money systems change tax’s role. Discussion of tax competition, inequality, and the political spread of low-tax dogma. Proposals for cooperation, transparency, and fairer taxation to strengthen societies.
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Laffer Curve Claim Explained
- Arthur Laffer's napkin curve claimed a single peak tax rate where cutting taxes could raise revenue.
- Laffer argued higher taxes discourage work and cause evasion, so rates above the peak supposedly reduce revenue.
Murphy Debated Laffer At The OECD
- Richard Murphy debated Arthur Laffer at the OECD in 2017 and won the audience vote 58% to 31%.
- They met in person, ate together, and Murphy used that exchange to test Laffer's claims directly.
No Practical Revenue Maximising Rate
- Empirical research shows no revenue‑maximising tax rate in most economies and tipping points are around 70% effective tax.
- Most countries, including the UK, have effective tax rates ~35–40%, far below that tipping point.