http://online.wsj.com/article/SB121365641014879041.html

Senator Obama in today’s Wall Street Journal:

“I'm a big believer in evidence. I'm a big believer in fact…If I saw strong evidence that an additional $300 billion in tax cuts that John has proposed…would actually boost economic growth and productivity, I’d be happy to take a look at that evidence. But I haven’t seen that. It’s all conjecture.” 

Where were you in the ‘80s, Mr. Obama? Or the sixties? Or the twenties? 2001? 2003? 

Here’s your evidence:

Tax cuts under the leadership of President Coolidge

In 1913 (when the federal income tax was established), the top marginal rate was 7%.

By 1918, this same top rate had risen to 77%.

In 1925, the top marginal income tax rate was reduced to 25%.

Over the next four years, economic output almost doubled.

Tax cuts under the leadership of President Kennedy

In 1962, the top corporate tax rate was reduced from 52% to 48%.

In 1964 (signed by President Johnson), the top marginal income tax rate was reduced from 91% to 70%.

What was the result on the economy? From 1959-1962, economic investment grew at an annual rate of 3%, but between 1962-1969, investment grew at an annual rate of 6.1%. After these tax cuts were repealed, investment grew at an annual rate of only 2.3% between 1969 and 1972. Furthermore, the gross national product grew at 2.4% from 1952-1960, but it grew at 4.5% per year from 1960-1970. 

What about the result on government revenue? From 1952-1959, government revenue increased 1.2% per year, but between 1962-1969, revenue increased at an annual rate of 6.4%. Furthermore, the deficit during these years fell from $7.1 billion to $1.4 billion. 

Tax cuts under the leadership of President Reagan

In 1981, the top marginal rate was reduced from 70% to 50%.

By 1988, this rate had been reduced to 28%.

What was the result on the economy? From 1978-1982, the real gross domestic product grew at an annual rate of 0.9%, but between 1983-1986, it grew at a rate of 4.8% per year. In 1982, the unemployment rate was 9.7%. In 1986, it was 7.0%, and by 1989 it had fallen to 5.3%.

Tax cuts under the leadership of President Bush

In 2003, the top marginal tax rate was lowered to 35%.

In 2004, tax revenues increased by 5.5%.

In 2005, tax revenues increased by 14.5%.

Supply-side economics has worked every time it has been tried. May I have my tax cut now, please?

Sources

http://taxesandgrowth.ncpa.org/news/do-taxes-affect-economic-growth

http://www.businessandmedia.org/commentary/2006/com20060111.asp