Quote: r3x29yz4a said: We had a surplus which is now gone.
We lowered taxes (which lowers money coming into the government).
Cutting taxes often leads to more, not less, revenue for the government.
Coolidge cut tax rates in the 1920s, Kennedy cut marginal tax rates in the 1960s, and Reagan cut them in the 1980s.
Under Coolidge, marginal tax rates were cut from the top rate of 73% to 25%. The economy rewarded this policy by expanding 59% from 1921 to 1929. Revenues received by the federal treasury increased from $719 million in 1921 to more than $1.1 billion 1929. That's a 61% increase (there was zero inflation in this period).
Under Kennedy, marginal tax rates were cut from a top rate of 91% to 70%. In real dollar terms, the economy grew by 42%, an average of 5 percent a year from 1961 to 1965. Tax revenue to the U.S. Treasury increased by 62%. Adjusted for inflation, they rose by one-third.
Under Reagan, marginal tax rates were cut from a top of 70% to 28%. Revenues (from all taxes) to the U.S. Treasury nearly doubled. According to the Budget of the U.S. Government, FY 1997, Office of Management and Budget. Revenues increased from roughly $500 billion in 1980 to $1.1 trillion in 1990.
Furthermore, there is a correlation between the Bush and Clinton tax hikes and a change in the revenue received by the Treasury. Martin Feldstien, professor of economics at Harvard, estimates that the U.S. Treasury would have collected two-thirds more revenue during the first three years of the Clinton presidency had his administration NOT raised taxes.
Source: mackinac Center for Public Policy
Published: 1997
Quote: theory9 said:
In 1998 - 2001 gross revenues exceeded expenditures.
The surplus which began in 1998 followed tax cuts in 1997.
In 1997, President Clinton, in response to GOP pressure, lowered the statutory capital gains tax to 20% from 28% in 1997 while expanding Roth IRA accounts.
Source: The Taxing Truth
By Michael Darda, economist at Polyconomics, Inc.
March 1, 2001 9:55 a.m
