Going back to the Laffer curve: We know that at a tax rate of 0% government revenues are $0. And that at at tax rate of 100% government revenues are $0. And that there is a curve in between those two points. We don't actually know what the curve looks like. So it's hard to predict what will actually happen to Federal Revenues.
If the actual curve looks like the red curve we will likely increase. If the curve looks more like the blue curve we will decrease. In either case GNP goes up, but does it go up enough to offset the decrease in the tax rate?
