Having a laff?

Heard of the Laffer Curve - no, neither had I until the other day.  I was reading an article which suggested that cutting taxes could in fact raise revenue.The premise is that, if you set income tax rates at 0% you will clearly raise no revenue, but equally if you set the rate at 100% you will raise no revenue, because nobody will bother to work.  So the idea is that as you move from 0% to 100% revenue will grow until you reach the point where people consider it's not worth doing any extra work, or maybe even getting a job at all, at which point revenue will start to fall and go on falling.  And that's the Laffer Curve.  Of course, what nobody really knows is where that tipping point is, and indeed it may not be a precise point - it may vary as circumstances vary.  This is what was behind the Government's decision to cut the top income tax rate from 50% to 45% - they reckon it will in fact increase the amount of tax they get, and it will be interesting to see if they are right.