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What does the Laffer curve show?

Updated: 8/19/2022
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The laffer curve shows that there is a level of taxation at which government revenue is maximised. It assumes that government revenue will be zero if tax rate is 100% since nobody would work and assumes that if tax rate was zero then government would receive no revenue. As such it is logical to assume that there must be a tax rate between 0 and 100 which would maximise government revenue
The Laffer curve is a graph in economics that shows the relationship between the federal tax rate, and total government revenue. If the y-axis is government revenue, and the x-axis is tax rate, the graph appears to be an upside down parabola; however, if the x-axis is govt. tax revenue, and the y-axis is tax rate, the graph is a sideways, parabolic non-function. Either way, at a tax rate of 100%, there is $0 in revenue, and at a tax rate of 0%, there is also $0 in revenue. It illustrates that at a certain tax rate, govt. revenue is maximized.

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