Final answer:
Most economists agree that currently in the U.S., an increase in personal tax rates would likely lead to higher tax revenues, reflecting that the economy is not at the point on the Laffer Curve where lowering taxes increases revenues.
Step-by-step explanation:
Economists generally agree that the U.S. economy operates at a point on the Laffer Curve where an increase in personal tax rates will not necessarily lead to an increase in tax revenues. According to economist Arthur Laffer, there exists a tax rate at which government revenue is maximized, and beyond this point, higher tax rates could actually result in lower tax revenues due to diminished incentives to work or invest.
Most economists believe the U.S. economy is not at a point on the curve where a decrease in taxes would lead to higher revenues, meaning that the correct answer is C: An increase in personal tax rates will increase tax revenues. However, this is within the context of current tax rates; the relationship is not linear and depends heavily on the existing tax rate.