Supply-Side Economics Worked
A Tale of Conservative Economic Policy
“Lower rates of taxation will stimulate economic activity and so raise the levels of personal and corporate income as to yield within a few years an increased – not a reduced – flow of revenues to the federal government.”
- John F. Kennedy, 1963
Economic policy has been an important aspect of the public sphere, what with debates as to how best revive our economy as it is crushed by the burden of expanding government. Though the Left would have you believe that tax cuts, especially for high-earners - incidentally, those who are subjected to the highest tax burden - have failed, it is clear from examining the records of Warren G. Harding, Calvin Coolidge, Ronald Reagan, and George W. Bush that the so-called “trickle-down economics” has been a massive success.
The statistics speak for themselves, demonstrating that lower taxes remove government burdens on commerce, thus leading to more prosperity and increased revenues to the government.
Let us envision a scenario wherein the federal government reduced income and corporate tax rates at all levels, lowering the burden on commerce. Because Americans consume rather than saving, we could expect more revenues to business as taxpayers, using increased money no longer being confiscated by Washington, spend that money. To meet this demand, firms would need to expand their operations, hiring more employees and paying more to their workers. As a whole, there would be more taxpayers, with higher incomes, helping, at least, to offset losses in federal revenues from the initial cuts.
Proof:
1. Tax revenues from those earning less than $5,000 decreased from $166 million in 1920 to $13 million in 1928.
2. Over that same period, revenues from those earning more than $100,000 increased from $321 million to $714 million.
3. Total income tax revenues rose from $1.075 billion to $1.164 billion.
4. Those earning less than $5,000 paid, as a percentage of the tax burden, 15.4 percent in 1920, but this decreased to 1.1 percent in 1928.
5. For those with more than $100,000 in annual income, this figure increased from 29.9 to 61.3 percent.
6. From 1922 to 1929, GNP increased, on average, at a rate of 4.7 percent.
7. Unemployment decreased from 6.7 to 3.2 percent.
8. The number of those reporting more than $100,000 increased by nearly four times.
9. Those reporting incomes between $10,000 and $100,000 expanded by 84 percent.
Source:
Veronique de Rugy, Cato Institute, using, in part, Treasury Department statistics:
