You saw the same GDP growth rates coming out of the 91-92 period, after taxes were raised.
value.
Your statement was:
"revenues also increase from natural economic growth. The question is what impact do they have in relation to the alternative (no cut)?"
I understood we were talking about the effect of rate cuts on revenue and not the effect of rate cuts on economic expansion. The long term definitely has rate cuts bringing in increased revenue. In the short term rate hikes either trimmed or at least slowed down revenue growth; the "91-92 period" is no exception.
If that's not what you were saying then we can also look at the effect of tax rate cuts on economic expansion.
The argument of Laffer goes back to economic growth. If tax rates are too high, a reduction of rates spurs faster economic growth, which then more than accounts for the lower tax rates. However, given no change, natural economic growth will result in higher tax revenues as well. The question is how flat is the laffer curve and where are we on it?
If you look at the curve you posted, there is little correlation between the "top tax rate" and tax receipts. There are periods when the tax rate increases, yet receipts climb just the same. The rate from 1950 to 1965 for example, stays high and steady, while tax receipt growth is nearly linear and identical in slope to 1990-2000, when rates were lower. (I realize you used a log scale, which is crucial to help identify faster or slower periods of growth than the nominal).
If tax cuts really resulted in growth, you should see a higher slope than average shortly after each drop in the tax rates, whereas a tax hike should see the opposite effect. You don't see either effect....
