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Originally Posted by Bluesman
I followed that, but is it NOT a positive correlation when each and every single time taxes are cut (and in particular, excessively-high marginal rates), that you get an effect that is almost NEVER seen pre-cut? in other words, a moribund and sluggish revenue growth ALWAYS shows a significant expansion post-cut, BUT growth due to other factors can be seen and accounted for and remain uncorrelated for the period during which no tax cut occurred?
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Look at the timing of some of the more prominent tax policy changes.
ERTA 1981. The Fed had just finished strangling inflation after pushing interest rates to over 20% and the oil shock of 1979 had just finished propagating through the economy. The tax package was passed and phased in at nearly the bottom of the business cycle.
EGTRRA 2001. Decreasing tax revenues until 2005. Passed during a recession that is no longer a recession, but nonetheless, the bottom of the business cycle.
JGTRRA 2003. Passed on the upswing of the business cycle.
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Originally Posted by Bluesman
I dunno, you're the doctor, here, but I was under the distinct impression that Sorry, forgot to add that they don't pay for themselves in the long-run, either was 180-out from the way lower tax rates were supposed to work, even allowing for other factors.
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The Administration’s message has been that they would pay for themselves and have paid for themselves, but the Administration’s Chairman of the Council of Economic Advisors stated at the time that this was an incorrect argument (and this is a position taken by the vast majority of economists, although there are still a few diehard supply-siders out there).