Spencer's Super-Happy Fun-Time Right-Wing Word Pit

This article explains why lower taxes seem to help the economy. The whole paper is worth a read. Really.

"Even though economists still disagree about the size and nature of taxpayer response to rate changes, most economists now believe that changes in marginal tax rates exert supply-side effects on the economy. It is also widely believed that high marginal tax rates—say, rates of 40 percent or more—are a drag on an economy. The heated debates are now primarily about the distributional effects. Supply-side critics argue that the tax policy of the 1980s was a bonanza for the rich. It is certainly true that taxable income in the upper tax brackets increased sharply during the 1980s. But the taxes collected in these brackets also rose sharply. Measured in 1982–1984 dollars, the income tax revenue collected from the top 10 percent of earners rose from $150.6 billion in 1981 to $199.8 billion in 1988, an increase of 32.7 percent. The percentage increases in the real tax revenue collected from the top 1 and top 5 percent of taxpayers were even larger."

Supply Side Economics
by James D. Gwartney
http://www.econlib.org/library/Enc/SupplySideEconomics.html

James D. Gwartney is a professor of economics and director of the Gus A. Stavros Center for the Advancement of Free Enterprise and Economic Education at Florida State University. He was previously chief economist of the Joint Economic Committee of the U.S. Congress.