INTERACTIVE TOOL · 48 COUNTRIES

Where do you stand on the Laffer curve?

The Laffer curve says: somewhere between 0% and 100% lies a tax rate that maximizes revenue – beyond that, revenue falls. Move your income and see where you stand against 33 other jurisdictions.

In 1974, economist Arthur Laffer sketched on a napkin in Washington, across the table from Donald Rumsfeld and Dick Cheney, a simple principle. At 0% tax rate, the state collects nothing; at 100% also nothing, because no one works on the books. Between those extremes lies a revenue peak.

According to CPB (Jacobs, Jongen & Zoutman, 2013, 'Over de top'), the Dutch revenue peak sits around 49%. The statutory Box 1 rate is 49.5% – right at the summit. Past 55% (Denmark 55.9%, Finland 56.95%), higher taxes yield less, not more, per Trabandt & Uhlig (2011, Journal of Monetary Economics).

This tool shows you that for your specific income. Move the amount, pick a departure and destination country, and the marker shifts across the curve. All rates come directly from national tax authorities (HMRC, IRS, BMF, Belastingdienst, Agenzia delle Entrate, and 29 others).

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ascending side – more revenue

Laffer curve: tax revenue per rate levelAsymmetric curve with uncertainty band. Y-axis: theoretical revenue (normalized). X-axis: marginal rate 0-100%. 26 departure countries (red) and 46 destinations (green) as flag markers at their statutory top rate.🇺🇸🇵🇹0%25%50%75%100%Marginal rate
Departure (F)Destination (T)Revenue-peak zone

Statutory vs. regime: This comparison shows statutory top rates (apples-to-apples). Special regimes (PT IFICI, IT impatriati, ES Beckham, CY non-dom, NL 30%-ruling, GE Small Business, TH LTR-visa) often reduce the effective burden substantially but don't apply to everyone – calculate your situation in the calculator.

Official sources per country (57)

Sources

  1. CPB Policy Brief 2013/04 – Jacobs/Jongen/Zoutman, "Over de top" – Dutch revenue-maximizing top rate at 49% (statutory 49.5% = right at the summit).
  2. Trabandt & Uhlig 2011, JME – "How Far Are We From The Slippery Slope? The Laffer Curve Revisited" – revenue-maximizing rate in advanced economies between 49 and 55%.
  3. Diamond & Saez 2011, JEP – "The Case for a Progressive Tax" – formula for optimal top rate using Pareto coefficient and behavioral elasticity.

Illustrative model with a stylised curve. The 49% peak is the CPB mid-estimate for the Netherlands (Jacobs/Jongen/Zoutman, 2013). Exactly where the top sits depends on behaviour: if income barely responds to rates it shifts toward 73% (Diamond-Saez); the more mobile you are, the lower your personal tipping point.

Not advice. Research data, not prediction. Tax burden based on public statutory rates; effective burden differs through deductions and social contributions. Uncertainty band reflects the range of empirical ETI estimates (0.2 to 0.5).

Frequently asked questions

What exactly is the Laffer curve?
A graph describing the relationship between tax rate and tax revenue. At 0% and 100%, revenue is zero. Between them lies a peak – exact location depends on behavioral elasticity and income distribution. Empirical estimates for advanced economies land between 49% and 55%.
How accurate are these numbers?
Marginal rates come directly from national tax authorities (Belastingdienst for NL, BMF for DE, HMRC for UK, etc.). Curve shape is calibrated to CPB 2013 for the Netherlands and aligns with Trabandt-Uhlig 2011 for the international band. It's a directional indication, not personal tax advice.
Why show statutory not effective rates?
For international comparison we need apples-to-apples. Statutory rates are public and uniformly defined. Effective rates vary per person (deductions, regimes, social contributions). Special regimes like PT IFICI, IT impatriati, ES Beckham, or CY non-dom often reduce burden significantly – calculate your situation in our Freedom Score calculator.
Is the Laffer curve real?
The mechanical principle (0% and 100% both yield zero) is not in dispute. The only question is where the peak sits. Estimates range from 43% (high behavioral elasticity) to 73% (low elasticity, Diamond-Saez 2011). Scientific consensus: between 49% and 55% for advanced economies.