I'll have to address your post in a couple of separate replies, but first let me address the Laffer Curve, which I also believe is a decent encapsulating theory of the relationship between tax rates and corporate profits/tax revenues.
There's is this common misconception among the GOP that tax cuts are always good. In fact, under Bush Jr., the GOP never met a tax cut they didn't like. In addition, they always talk about the Laffer curve to prove their point that tax cuts will increase tax revenues. However, cutting taxes is not always good thing, if you are trying to maximize the economic good and tax revenues.
First, there is an optimal level of taxes according to Laffer. So to determine if tax cuts will generate more corporate profits and tax revenues, you must first understand which side of the optimal point of the Laffer curve you are on.
Reagan was on the right side, so his overall tax cutting exercises, produced unprecedented levels of corporate and economic prosperity, which lead to higher tax revenues. Arguably, Clinton was near or at the optimal level tax rates. That sweet spot lead to again unprecedented levels of economic prosperity and eventually budget surpluses.
Bush Jr., on the other hand, was on the left side of the Laffer curve. It's easy to see that now with 20/20 hindsight. His two tax cuts reversed the trajectory of budget surpluses established by Gingrich and Clinton and lead to the unsustainable budget deficits that we have today.
See the chart I created below to help depict my points above:
 |
