Ever since the world fell prey to the mullahs of the free market in the 1980s, no amount of real world evidence has managed dispel one key tenet of their economic faith. Namely, the idea that if you cut income taxes and taxes on small business, a wave of individual enterprise and entrepreneurial energy will thus be unleashed, profits will rise and – hey bingo! – the tax cuts will soon be paying for themselves via all that extra economic activity that this virtuous cycle will have set in train.My off the cuff response:
Tax cuts are never significant because state-spending won't allow it.
Insignificant tax cuts will not stimulate entrepreneurship.
Typical governments are in the business of balancing budgets. REAL tax cuts are rare in the developed world.
What I do believe is that the Laffer Curve is real. You can only squeeze a lemon so much.