George Gilder - Forbes ASAP Message Board

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Technology Stocks : George Gilder - Forbes ASAP

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To: DMaA who wrote (130)	10/1/1997 10:55:00 PM
From: JF Quinnelly	of 5853

By "yield to the Treasury" I'm referring to tax receipts. And while the total receipts collected in 1989 were much larger than those of 1981, you can't simply measure the difference and ascribe it all to the tax cuts. You have to perform some complicated analysis to isolate the tax effect from other factors that added to the growth of tax receipts, such as the rather large Keynesian style boost from deficit spending, the business cycle, the normal growth trend of the economy, and so forth. The best easily accessible study I know of is Lawrence Lindsey's The Growth Experiment. Lindsey was a Harvard professor and a fan of Reaganomics, who later went on to be a Fed governor. He describes what factors you must account for, describes the math involved, and gives you a lot of useful graphs. Anyway, his work verified the claims made by Martin Anderson, one of the principal architects of the Reagan program. I believe the tax cuts reclaimed nearly 30% of the projected revenue loss to the Treasury because of the added economic growth that resulted from the tax cuts. In the case of the capital gains tax cuts, the Treasury actually gained more than 100% of the projected revenue loss.

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