The Reality
All of this information comes from the Bureau of Economic Analysis.
Tax revenues from individual taxpayers were $290 billion in 1981 and $451 billion in 1989 for an increase of 55%. Over the same period, the GDP price deflator increased from 59.128 to 78.569, or an increase of 32.87%. This makes the increase in tax revenues from individuals for Reagan's presidency 22.13%.
Tax revenues from individual taxpayers were $505 billion in 1993 and $904 billion in 2001 for an increase of 79%%. Over the same period, the GDP price deflator increased from 88.39 to 102.42 or an increase of 15%. This makes the increase in tax revenues from individuals for Clinton's presidency 64%.
Tax revenues from individual taxpayers were $994 billion in 2001 and $924 billion in 2005 for a decrease of 7%. Over the same period, the GDP price deflator increased from 102.42 to 112.744 or an increase of 10%. This makes the increase in tax revenues from individuals for Bush a decrease of 17%.
So, we get the following inflation adjusted increases in individual tax revenue for each of the last three presidents:
Reagan: 22.13%
Clinton: 64%
Bush: -17%
Here is a chart of the year over year percentage change in federal tax receipts:
Economist Hale Stewart described this Government chart:"Kennedy cut taxes in the early 1960s. What happened? There was a spike in revenue in the late 1960s. Maybe that means the Laffer curve is correct?
Reagan cut taxes in the 1980s. But there was no spike in revenue. Maybe tax cuts don't pay for themselves. But, let's try that experiment again.
Bush cut taxes twice (not once) in the early 2000s. Notice that after the first tax cut revenues dropped. But then tax revenues spiked -- so they must work! Actually, no. Remember this is a year over year chart. That means the spikes in the later 2000s are being compared to the dropping revenue is the early 2000s. In other words -- the tax cuts didn't pay for themselves (again).
The chart is very clear. Kennedy's cuts worked. Reagan's didn't. Bush II's didn't
Can we stop this crap now?"
Yes. I hope so.
