Tax cuts under John Kennedy, Ronald Reagan and Bill Clinton (during his second term) all produced faster economic growth, more jobs and higher tax revenues. Indeed, the Clinton 1997 capital-gains tax cut was the driving force for late-decade budget surpluses. Revenues in this period soared as profits accrued from stock market gains and stock options. It was a near-perfect illustration of the Laffer Curve, which says, in clear terms: Tax something more, get less of it; tax something less, get more of it. The less we penalize work and investment, the more work and investment there will be.
This is Economic Behaviorism 101, and it’s a simple science that too many members of the U.S. Congress and most state governments fail to comprehend.
Or do they get it?
The so-called sin taxes on alcohol, beer and tobacco suggest that liberal lawmakers just might understand the behavioral basics of taxation. In recent years, legislatures on every level have poured taxes on these products