People who say "Cutting taxes increases revenue". - NOT
If reducing the tax rate increases taxes, why stop at 33 or 32 % - why not go to 20, or 10 or 0! That should produce so much revenue that the government can do anything it wants....
Of course that is ridiculous. The fact is that the tax rate, in fact taxes in general, are a balancing act. Raise them too high and people look for ways to get around them, too low and you don't collect enough revenue. Tax cuts are usually done to prime the pump at the end of a recession, or if too many people are complaining.
Reagan is often called the patron saint of tax cuts - but check this link out
However, there is one thing that I do agree on - that if you increase government spending, you will increase tax revenue,
>>
Receipts from individual income taxes rose to $446 billion in fiscal 1989 -- President Reagan's last budget -- from $286 billion in fiscal 1981, the year Reagan began to slash personal tax rates -- a 56 percent increase.
Annualized, tax receipts grew faster than that period's 4 percent inflation.
During the same period, federal spending rose from $678 billion to $1.143 trillion -- a 69 percent increase. <<
http://www.ncpa.org/pi/taxes/pdtx64.html
Gee, do you think the increase in spending resulted in more jobs and therefore more taxable income? Unfortunately, you don't get back what you put in...
Cutting taxes without cutting spending is bad fiscal policy.
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