Laffer Curve: One of the First Mathematical Descriptions

The article proves the priority of the author to obtain in 1994 one of the first mathematical descriptions of the Laffer curve, which is also claimed by the Georgian economist Vladimir Papava, who published the same result in 1996. The author proved for the first time that in a free market, the total profit deducted to the budget from all enterprises of a certain territory is proportional to the product of the tax rate and its natural logarithm. It follows that the maximum of this function on the unit interval of the variable value of the tax rate is equal to the reciprocal of the base of the natural logarithm, that is, 0.368 or 36.8%. To confirm the found optimum, it is proposed to conduct a full-scale economic experiment. The pattern found theoretically is proposed to be called “the market law of optimal taxation of enterprises” (the law of the inverse base of the natural logarithm).