The White House announced yesterday that the 2008 budget deficit would be smaller than originally projected, as will the 2007 deficit. The reasons: 1) the economy is strong and 2) tax cuts stimulate taxable economic activity.
We’ve know that that tax cuts increase federal revenue (to a point) since John F. Kennedy explained it in 1961. The Laffer Curve was the final word on the subject and should have earned Arthur Laffer the Nobel Prize for economics.
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