It was an absurd theory that by cutting taxes you would increase government revenues, because the growth of the economy would create an overflow of taxes that would fall into the government coffers.
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The reality is that during the Reagan years, for instance, we doubled the amount of revenue that we were sending to Washington, D.C. after the tax cuts took effect.
Cutting taxes for very high income people an average of more than $100,000 a year for people that make more than a million dollars a year is not an effective way to get the economy going.
After 2003, we lowered taxes across the board. And by 2004, revenue to the federal government grew. In the 1980s, Ronald Reagan cut taxes dramatically. And by the end of the decade, revenue coming in the federal government had doubled.
A tax cut to compensate for a tax increase is not a cut - it's a con.
The stagflation of the 1970s blessed us with damaging wage and price controls and the utterly counterintuitive supply-side notion - famously drawn on a napkin - that cutting taxes would lead to higher tax revenues.
My tax cut would cut hundreds of billions of dollars. So to do it, you have to be willing to cut spending, too. But if you were to cut hundreds of billions of dollars in taxes, that money's left in communities.
Governments enjoying surpluses have a very strong temptation to splash money around, and while tax cuts are always appealing, cutting taxes at the top of a boom runs the real risk of creating a structural deficit when the boom subsides.
The basic idea that if you increase government spending or you cut people's taxes that stimulates the economy and lowers the unemployment rate, is a very widely accepted idea. It's in every economics textbook, that's what we teach our undergraduates, and I certainly try to teach them the truth.
The problem is government spends too much. So raising taxes is what politicians do, instead of reducing spending.
You don't get an economy growing by raising taxes.