OC: Overhyped curve.
It's real, but we're nowhere near the part of the curve where one can increase government revenues by cutting taxes. Not even the Reagan-era cuts did that.\Arguably, the Kennedy-era cuts may have done that, but at this point it's just technobabble used by so-called conservatives to provide an invalid justification for the self-serving tax cuts they want.
Revenues in the 1980s grew nearly at the same rate in the 1980s as they did in the 1990s . The large deficits were due to the loss of revenue in the first couple years after the initial tax cut and large spending increases in defense. After 1984 the tax cuts no longer were a problem, and by then most of the deficit was due to increases in defense spending.
The deficit was also lower than it would have been otherwise thanks to the various tax increases after 1981.
http://www.politifact.com/virginia/statements/2012/jun/25/gerry-connolly/rep-gerry-connolly-says-reagan-raised-taxes-during/https://en.wikipedia.org/wiki/Tax_Equity_and_Fiscal_Responsibility_Act_of_1982 was one of the three major tax increases. The second was the increase in payroll taxes that fall mostly on 'middle class' taxpayers.
What Reagan did, more or less, was cut taxes for the wealthy and then later increase them on the 'middle class.' This was somewhat offset by the increase in the Earned Income Tax Credit which especially removed the payroll tax increase for the 'lower middle class.'
Of course, I'm far from arguing that cutting taxes on the wealthy was a bad idea at that time given the top income tax rate, but there should be a fuller understanding of what Reagan ended up doing. Of course, cutting the top rate from 70%, and cutting it during his Administration to ultimately 28% are two entirely different arguments.
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