Republicans love to say tax cuts pay for themselves. It's an easy sell - it promises something for nothing. If we cut taxes people will start working harder to keep more of their money. This effort will grow the economy fast enough to increase the overall tax base, which in turn will actually increase taxes.
The problem is this has never worked.
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 inflation-adjusted increase in tax revenues from individuals for Reagan's presidency 22.13%.
Tax revenues from individual taxpayers were $505 billion in 1993 and $994 billion in 2001 for an increase of 96%%. Over the same period, the GDP price deflator increased from 88.39 to 102.42 or an increase of 15%. This makes the inflation-adjusted increase in tax revenues from individuals for Clinton's presidency 81%.
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 inflation-adjusted 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: 81%
Bush: -17%