Wrong... See that is the problem. You need to read the Wall Street Journal. It will enlighten you ...
Case in Point. Kennedy and Regan tax cuts... Look at how the tax revenue quadrupled with in a decade after the cut each time.
Dear Sprite518,
Why would I be wrong?
You asked whether cutting tax rates increases tax revenues. I said, it depends, check out the Laffer Curve.
The whole theory that reductions in rates can lead to increases in tax revenues comes from the supply side economists (of which I count myself a proponent). Fundamental to their analysis is Arthur Laffer's Laffer Curve.
I'd think that someone arguing that tax revenues can go up when rates go down would know that.
Laffer asserts (and I agree with him) that there are optimal rates of taxation. Implement a tax rate below the optimal rate, and tax revenues will fall. Implementing a tax rate above the optimal rate, and tax revenues will fall.
Thus, some tax cuts increase revenues, but it is also possible to cut tax rates below the optimal level, in which case, revenues decline. So, at least according to the supply side economists and Dr. Laffer, the answer to your questions is, "It depends."
Certainly, in that marginal rates in the late Eisenhower adminstration were above 90%, it doesn't take a rocket scientist to see that a rate over 90% suboptimized tax revenues. LOL.
Thus, the Kennedy tax cut was a good idea.
Similarly, even by the time President Reagan came into office, the marginal federal personal income tax rate was 50%. This rate certainly suboptimized tax revenues. Again, it doesn't take much to figure that a rate of 50% isn't going to produce optimal tax revenues.
However, if one were to find that the optimal rate was 25% (and I'm not suggesting that that's the optimal rate, I don't know what the rate would be to optimize tax revenues), cutting it to 15% would reduce tax revenues.
And of course, if you assert that tax cuts are ALWAYS good, well, then, take the argument to the logical conclusion. How much tax revenue will be raised if all rates on all taxes charged anywhere by the government are reduced to 0%? That would be, after all, the ultimate tax rate reduction, would it not?
sitetest