Sure, go ahead and post the links. However, I'm also curious as to whether or not you believe that the Reagan income tax rate cut paid for itself.
Under President Reagan, the capital-gains tax rate was cut again in 1981 to a maximum of 20 percent, then increased in 1986 to 28 percent, with a small additional increase in the early 1990s to 29.19 percent. In 1997, as a result of the Clinton-Gingrich compromise, the rate was cut to 21.19 percent. In 2003 the rate was cut to a 15 percent maximum.
Treasury has now released the data through 2002. As result of the frequent rate changes, we have considerable evidence who was right and who was wrong. When the capital gains tax rate was at its maximum in the late 1970s, capital-gains tax receipts averaged slightly under $8 billion annually.
From 1998 to 2002, the maximum capital-gains tax rate was approximately half the rate of the late 1970s, yet capital-gains tax revenues averaged 11 times higher ($88.6 billion per year), though the economy (nominally) was only 4 times larger.
I have summarized some of the new Treasury data in the following table that clearly indicates how sensitive capital-gains realizations are to tax rates.
Now, maybe you don't consider these capital gains tax cuts to be "major tax cuts", but I think that a cut that increased revenue can be said to have paid for itself. Do you agree?
I never thought that the Reagan tax cuts paid for themselves. That never bothered me either. I don't believe the purpose of a tax cut is to maintain the level of government revenues. I believe the purpose of a tax cut is to increase the level of American's revenues. I did find this interesting info from an interesting study.
According to the graph and second table, the GDP reached a high 8-year growth rate of 34.3% from 1982 to 1990. However, the GDP seems to have reaching a similar high about every ten years over the past several decades. It reached a high of 41.57% from 1958 to 1966, 29.20% from 1971 to 1979, and 32.58% from 1992 to 2000. Hence, these figures don't provide any strong evidence that the Reagan tax cuts permanently affected the GDP one way or the other.
This was interesting as well:
The argument that the near-doubling of revenues during Reagan's two terms proves the value of tax cuts is an old argument. It's also extremely flawed. The growth of receipts by source, outlays, and GDP over every 8-year period since 1940 is shown in the graph and tables at recgrow.html. As can be seen in the first table, total receipts increased 75.84 percent from 1980 to 1988. However, this was the slowest 8-year growth rate since a 75.62 percent growth in total receipts from 1963 to 1971. Of course, these results are likely skewed by the high inflation that occurred during the 70's. Hence, it makes more sense to look at the "real" growth rates, that is, the growth rates corrected for inflation. The second table shows that the real growth rate from 1980 to 1988 was 20.72%. The 8-year growth rates increased in the following years to a high of 33.11% from 1983 to 1991. However, the real growth rate of total receipts reached higher highs of 38.15% in 1971 to 1979 and 57.02% from 1992 to 2000.
Now, I don't know if the info from this study is correct, but assuming it is, the first excerpt seems to show that at the very least, the Reagan tax cuts did not cause GDP growth to decrease.
The second excerpt seems to show that even after the huge Reagan cuts in the top rates,from 70% to 50% to 28%, real tax receipts still grew by 33.11% between 1983 and 1991. A non-expert could make the argument that a 60% reduction in the top rate that still increased (rather than decreased) receipts by 33.11% has "paid for itself"
But I won't even make that argument. I'll make the argument that the tax cuts at least partially paid for themselves. I don't think you'll disagree with that, will you?
And I'll repeat my earlier belief that the purpose of the cuts is to increase the income of Americans. I wonder if you have an analysis of employee compensation for similar 8 years periods before and after the tax cuts. And for corporate income for similar 8 years periods before and after the tax cuts. Thanks in advance.