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Accordance with the guidelines resulting from the  Income effect Higher public levies reduce the final wages that workers receive. People may feel the need to work more to achieve the expected income. Substitution effect Another possible scenario is that employees may feel discouraged by lower wages and will not see the point in working harder. Examples of the Laffer curve Below we present examples of economic situations when this phenomenon could be observed: USA In the s, California cut property taxes by more than half. Tax rates dropped from % to %, which resulted in an increase in revenues to the US budget by %. It also showed.

That tax reforms most often affect the wealthiest taxpayers. Their share increased fro. However, almost half of the less wealthy population paid less - froOther noticeable effects of reducing applicable tax liabilities in phone number list the United States were to increase labor supply by society to invest more. However, as a result of the change of government in the USA, in it was decided to increase the personal tax froHowever, it turned out that despite the increase in the tax rate, a year later the share of income tax in the state budget was lower. Poland In Poland, the Laffer curve effect was also possible.



The increase in customs duties and taxes on cars imported from abroad in - did not result in an increase in budget revenues, but in their decline. The situation repeated itself in . When the excise tax on popular cars increased from % to %, their sales in May fell by % compared to the previous year. Only excise tax revenues increased, but VAT revenues decreased. At the end of the s, the situation of budget revenues from excise duty on hard alcohol was similar. Despite subsequent excise tax increases, revenues in were lower than in.  way, including: limited financial resources, which often limits their scope of activity.