High marginal tax rates can discourage work, saving, investment, and innovation, while specific tax preferences can affect the allocation of economic resources. The Laffer Curve economic theory suggests that there is an optimal tax rate that maximizes revenue. Beyond this rate, higher taxes discourage economic activity, reducing overall tax revenue. The Laffer Curve implies that excessively high tax rates can lead to decreased economic growth and lower tax revenue.
Experienced tax consultant specializing in tax compliance, tax advisory, management of KRA disputes and tax training services at TAC Professional Services Kenya
Let me leave this one here Tax cuts vs Tax hikes #financebill2024