Tax Cuts Raise Revenue
Retailers know they can generate revenue by putting things on sale. Whether they are selling cars or crackers sales generate revenue. If you engage in static analysis, you might think that cutting prices will result in making less money, but if by cutting prices you sell more product you actually make more.
The same analysis applies to taxe cuts on the Federal level. The Kennedy tax cuts in the 60's and the Reagan cuts in the 80's and smaller capital gains cuts in the 90's all produced increased revenue to the Federal government. That is why it is not correct to argue that the acceleration of the Bush tax cuts will increase the deficit. That argument is contrary to history and is based on the same faulty logic that suggest putting items on sale means a merchant will make less.
Retailers know they can generate revenue by putting things on sale. Whether they are selling cars or crackers sales generate revenue. If you engage in static analysis, you might think that cutting prices will result in making less money, but if by cutting prices you sell more product you actually make more.
The same analysis applies to taxe cuts on the Federal level. The Kennedy tax cuts in the 60's and the Reagan cuts in the 80's and smaller capital gains cuts in the 90's all produced increased revenue to the Federal government. That is why it is not correct to argue that the acceleration of the Bush tax cuts will increase the deficit. That argument is contrary to history and is based on the same faulty logic that suggest putting items on sale means a merchant will make less.
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