That’s the same argument we got before the Reagan Tax and Kennedy Tax cuts. As it turns out, lower taxes actually increased receipts. It the Laffer Curve in action and it’s been proven not only in the US, but in Britain and India as well. I would couple the tax cuts with Warren Buffet’s idea: Any congressman who votes for a budget that leads to an increase in the deficit of more than 3% cannot stand for reelection.
” As it turns out, lower taxes actually increased receipts.”
Lowered them by one third. The cuts were only predicted to recoup 2/3 of each dollar cut and that’s what they did.
Martin Anderson in ‘Revolution’ describes the goals of the Reagan program from the POV of an insider who helped design it and he explicitly rejects the idea that the cuts generated an increase in receipts. They asked Tip O’Neill for spending cuts because they knew receipts would fall off.
Total receipts grew over eight years but that includes factors other than rate cuts. The data can be found in Lawrence Lindsey’s ‘The Growth Experiment’, a sophisticated regression analysis of the effect of the rate cuts. Lindsey is a GOP economist and a fan of Reagan so it’s a friendly study. The sole rate cut that increased revenue was the capital gains cut which ironically was signed by Jimmy Carter.