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Politics : Formerly About Advanced Micro Devices
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To: Alighieri who wrote (614390)6/3/2011 6:31:41 PM
From: TimF  Read Replies (2) of 1578439
 
The early 2000s recession lasted 8 months, it was shallow, the GDP loss was 0.3%

Income tax revenue often goes down in a recession, more than the GDP goes down. And in this case the revenue went down with the recession (before the tax cut). It also went down sharply during the next recession (without any additional cut in tax rates).

The payroll tax revenue (as shown by your link) also went down with the recessions, just not as much. (Which is also fairly normal, income taxes, esp. progressive income taxes, are more volatile then payroll taxes, broad sales taxes would be less volatile then either.)

As for economic growth from tax cuts, they are hardly the only factor. They are positive for economic growth, but they won't prevent a financial crisis.
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