Laffer points, area of fiscal contradictions and taxpayers’ acceptance power

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The Laffer curve is the eternal problem of mathematical economics. Attempts to find the Laffer curve functions lead to new results that do not give the function in coordinates “tax burden - tax revenues” but give results in larger dimensions. Purpose of the article is developing tools to access the excessive tax burden on organizations. The general methods used in the article are analysis, generalization, synthesis. Special methods are mathematical induction, mathematical methods. In the study previously proposed mathematical models of Laffer curves by V.G. Papava (Ananiashvili, Papava, 2010) and E.V. Balatskii (Balatskii, 2000) are generalized and clarified. Taxation limit concept is expanded and necessity of determining the lower taxation limit is shown. The new approach to determining the values of Laffer points based on the use of tax burden and current assets turnover ratio is proposed. The determination of taxpayers’ acceptance power (in meaning “exponent”) is introduced and the property linking it with area of fiscal contradictions is shown. The constancy of the location of the first and second kind Laffer points is proved. Conditions limiting the sets of values of Laffer points are given. As a result the concept of the area of fiscal contradictions is divided with concepts of Laffer curves and Laffer points.

About the authors

Gleb V. Shcherbakov

Peoples’ Friendship University of Russia (RUDN University)

Author for correspondence.

master student of S.M. Nikol’skii Mathematical Institute of Peoples’ Friendship University of Russia (RUDN University).

6 Miklukho-Maklaya St., Moscow, 117198, Russian Federation


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Copyright (c) 2019 Shcherbakov G.V.

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