The classical backward bending of the labor supply curve has been extended to case inverted S-shaped during last three decades. According this extension, at very low net wage levels near subsistence income level, positive shape may also be curved and become negatively sloped. A decrease in rate requires an increase supply, maintain a minimum level for survival. leads double-peaked Laffer curve,...

The first is based upon the seminal work of Nobel Prize winner Larry Klein in his 1947 paper. This has two basic components. First, an essentially Keynesian system of macro-theoretical relationships. Second, fitting curves (planes) through empirical macrodata using econometric (statistical) techniques to estimate parameters for these theoretical relationships. Over the past 60 years, the models...

1. Theoretical basis Studying the relation between the tax pressure and tax incomes, A. Laffer together with V.A. Canto and D.H. Joines (1978) in their paper " Taxation, GNP and Potential GNP " , reached the conclusion that the growth of the tax pressure does not necessarily determine the adequate accumulation of tax incomes, in exchange, the diminution of the tax pressure generates favorable c...