Quote:
Originally Posted by jyl
I've never seen anyone provide evidence that tax cuts lead to tax revenue increases in the real world. With 100 years of pretty good data, you'd think the people who believe this could list each federal tax cut and show that >50% of them resulted in higher revenues from that tax the following year. No proof, no credibility.
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Logically, it depends on the state of the economy. If an economy is in a crisis of capacity (where demand outpaces production), cutting taxes to allow business to expand and hire more people would logically increase revenue.
When an economy is in a crisis of demand (where debt and unemployment keeps consumers from buying - which is the state the US and much of the world is now) cutting taxes on business just gives them more money to stash in the bank. They aren't going to use it to increase production capacity when consumers aren't buying/can't buy the products they make. That's the current situation - American companies have a record nearly $2 trillion sitting on the sidelines now. What is going to get this economy moving is cash in the hands of consumers, not cuts in the taxes of producers.