I always thought of it as the sweet spot where you take in the most tax revenue without having people cheat on taxes to avoid them.
For example if you lower taxes too much you leave revenue on the table same if you raise taxes too high people hide income and use loopholes to avoid paying higber tax rates and you also lose revenue
I always thought of it as the sweet spot where you take in the most tax revenue without having people cheat on taxes to avoid them. It's a dynamic process...non linear and not intuitive....a Saddle Point
In mathematics, a saddle point or minimax point is a point on the surface of the graph of a function where the slopes of orthogonal function components defining the surface become zero but are not a local extremum on both axes. An example of a saddle point shown on the right is when there is a critical point with a relative minimum along one axial direction and at a relative maximum along the crossing axis. However, a saddle point need not be in this form. For example, the function f = x^2 + y^3 has a critical point at that is a saddle point since it is neither a relative maximum nor relative minimum, but it does not have a relative maximum or relative minimum in the y-direction.
“For example if you lower taxes too much you leave revenue on the table...”
IT’S NOT REVENUE! It’s a TAX. Taxes are NOT revenue, they are taxes.
For 112+ years THERE WERE NO INCOME TAXES!
NO ‘revenue’ to leave on the ‘table’ -—
Please adjust YOUR logic, it’s clearly out of whack.
Peace to you, I only mean this is an instructive way.
And, BTW why does the Federal Government always need MORE money? Let them/it/whatever do without. I have many times so should the US Government.