usual suspect > wrote in message >.. .
> Ignorant wrote:
> > A government gets it's money from the workers and the less number of workers
> > the less money that government has to spend.
>
> Only if it collects x amount per worker. That's not how our system
> works. It's based on a "progressive" tax which generally punishes
> achievement and encourages sloth. Revenues are a function of tax rates
> in relation to economic activity. Increased levels of economic activity
> combined with lower tax rates (which usually spurs economic activity)
> can produce more revenue than higher tax rates (which usually slow down
> economic activity) and a slower economy. JFK and Reagan both cut tax
> rates, and net revenues increased as a result of the economic activity
> which followed in each instance. We've also seen the same effect with
> the tax rebates in the last couple years, particularly in the last quarter.

In the case of Reagan, real income tax revenue was lower in each of
the first 5 years after the tax cut than the year before. Revenue
jumped in year 6, but only because loopholes were closed. Economic
activity, as measured by the GDP growth rate, was not any faster after
Reagan's tax cut than it had been historically, or even in the
business cycle just prior to the tax cut.

As far as Bush's tax cuts goes, the jury is out. Revenue is way down.
The GDP growth rate since the first tax cut has been about 1%-point
lower than either the historical average or the previous business
cycle. But, it is too early to make conclusions because we are only
in the beginning of an expansion.

Josh Rosenbluth