| Agree... that a cut in federal income tax rates would lead to higher government revenue within five years | Uncertain... | Disagree... | |
|---|---|---|---|
| Nonpartisan Survey of Leading Economists by University of Chicago | 0 | 4 | 96 |
Sources:
igmchicago.org
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Republicans often claim that tax cuts, particularly for the wealthy, will boost the economy so much that they will pay for themselves over time. However, in a survey of leading economists of all ideologies, conducted by the University of Chicago's business school, no economist believed that cutting current tax rates would lead to more government revenue. While 35% believed that such cuts would lead to a somewhat higher GDP, that does not denote that the financial prospects of most Americans would be bettered.
I think the key words here are "within five years." No self-respecting economist is going to claim that cutting taxes would lead to higher government revenues over such a short period of time. If the question were asked for the long term, say 30 years, or even 50, I suspect the responses would be a lot more divided, particularly given how astoundingly liberal (in the classic sense of the word, not the contemporary American political meaning) American economics tends to be.
Does higher government revenue equate to a "GOOD THING"?
For most people, higher government revenue is a good thing, dependent on how that revenue is obtained (if a tax cut led to higher revenue over the long term, I don't think anyone would call that bad policy).
Dustin, great point. I'd considered this issue as well, unfortunately, there is no data on the topic so far as I could find.
That said, there is significant reason to believe a significant consensus would still agree. Given the multiplying effect of govenrment revenue into the economy, and that the debate on taxes for at least the last decade has centered on whether to raise taxes specifically for the rich (so, effectively, wealth redistribution), it seems likely that the additional federal spending on an annual basis would outpace any eventual revenue increases beyond 5 years through tax cuts. In this vein, the IMF has recently declared current levels of income inequality to hinder economic growth, stating "revenue-maximizing [personal income tax] rates are probably somewhere between 50% and 60% and optimal rates probably somewhat lower than that."