Thanks to this poll, I was curious as to how much, if anything, tax cuts really do cost the nation. Back in 2006, the Bush Administration claimed that tax cuts "pay for themselves", pointing to the increase in revenues from 2005 and the then projected revenues from that current year; however, according to The Center on Budget and Policy Priorities, the evidence tells a very different story. The tax cuts have not paid for themselves, and economic growth and revenue growth over the course of that period were not particularly strong. Revenues grew much more quickly in the 1990s, when taxes were raised, than in the 1980s, when taxes were cut. The Center points out that, even taking into account the stronger revenue growth that was projected at the time for the fiscal year of 2006, real per-capita revenues had simply returned to the level they reached more than five years previous, when the current business cycle began in March 2001. In contrast, in previous post-World War II business cycles, real per-capita revenues have grown an average of about 10 percent over the five and a half years following the previous business-cycle peak. By this stage in the 1990s business cycle, real per-capita revenues had increased by 11 percent (
Claim That Tax Cuts "Pay For Themselves" Is Too Good To Be True — Center on Budget and Policy Priorities). Fact Check weighed in a few years ago, too. With the possible exception of corporate income taxes, the supply-side theory that tax-cut proponents often espouse suggests that a higher tax rate can generate just as much revenue as a lower rate. "But", the article goes on to say, "most economists are not Laffer-curve purists. Instead, while they may believe in the power of tax cuts to create an economic boost, they don't say that growth is enough to completely make up for lost revenue. For example, N. Gregory Mankiw, former chair of the current President Bush’s Council of Economic Advisers, calculated that the growth spurred by capital gains tax cuts pays for about half of lost revenue over a number of years and that payroll tax cuts generate enough growth to pay for about 17 percent of what is lost." (
FactCheck.org: Have tax cuts always resulted in higher tax revenues and more economic growth as many tax cut proponents claim?)
I would, however, love to read economists opposing the view that tax cuts do not pay for themselves, as I am no economist myself. Getting both sides of the story is important, imho, and i'm sure there is plenty of differing opinions armed with adequate evidence on the actual cost of tax cuts.