If nothing else, economists are good at naming things. Malthusianism, Abenomics or, my personal favourite, Baumol's cost disease. But for policymakers, the most important theory is perhaps the Laffer curve, named after the American economist Arthur Laffer, who argued there is a theoretical tax rate at which maximum revenue is achieved.
This makes intuitive sense. Clearly, a tax rate of nil would yield no income. Nor would a rate of 100 per cent, because people would have no incentive to work. It is where the prophesised sweet spot lies that remains contentious and highly political.
