To get called on such obvious sophomore undergrad mistakes....well, P-Kroog would be embarrassed, if he had not long ago sold his soul to the goddess Fame.
The 80s revenue increase occurred over a period in which Reagan signed off on six or seven tax increases. So observed revenue growth is not wholly the result of the underlying supply side elixir.
Some pro-investment features of the 1981 bill (which, foolishly, was phased-in during 1983-84)were repealed premturely, alas. But the point here is that tax RATES, indivdiual and corporate, went way down. Cutting the top tax rate from 70% to 28% meant getting rid of many bracket that previously existed between 28% and 70%. Yet revenues rose rapidly in real terms because the amount of income rose, and the amount reported to the IRS rose even more.
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The 80s revenue increase occurred over a period in which Reagan signed off on six or seven tax increases. So observed revenue growth is not wholly the result of the underlying supply side elixir.
It would seem economist has slid down the hierarchy of P.K.'s curriculum vitae to about 5 place...
Some pro-investment features of the 1981 bill (which, foolishly, was phased-in during 1983-84)were repealed premturely, alas. But the point here is that tax RATES, indivdiual and corporate, went way down. Cutting the top tax rate from 70% to 28% meant getting rid of many bracket that previously existed between 28% and 70%. Yet revenues rose rapidly in real terms because the amount of income rose, and the amount reported to the IRS rose even more.
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