Arthur Laffer: Tax rate should 'provide for growth' The Laffer Curve, devised by the American economist Arthur Laffer, suggests that at 0% no tax is paid and at 100% no tax is paid - because no one will bother working. Between those two points is a curve dictating the tax rates which will optimise income. "When you raise tax rates people find incentives... to evade, avoid, or otherwise not report taxable income," he warned.