"It is a paradoxical truth that tax rates are too high today and tax revenues are too low - and the soundest way to raise revenues in the long run is to cut rates now."
John F. Kennedy (1917-1963)
Not so paradoxical really. If people can keep what they earn they do things with it! And what they do contributes more to economic activity than what gubment can do with it.
What does the gubment do with the money? Transfers it, usually to people who do not create economic activity.
When more of what a populace earns is left with that populace, it is like a rising tide and all boats are raised. This is the phraseology Reagan used with his tax cut.
What is the first recorded record of a tax cut? You would have to go to about 1750BC and a dream.
We see in Genesis 41 that Pharaoh had a dream, twice, that bothered him greatly. It seems that seven "fatfleshed" kine (beef cattle) came up out of the river. They were followed by seven "leanfleshed" kine, so ill favoured that Pharaoh had never seen such "for badness: And the lean and the ill favoured kine did eat up the first seven fat kind ... but they were still ill favoured." (verses 18-20)
Pharoah could find no one to interpret his dream. He heard about a Hebrew inmate, Joseph, who was known to have interpreted many dreams. And he called for him.
The interpretation was that there would be seven years of agricultural plenty, followed by seven ill favoured years, "and all the plenty shall be forgotten in the land of Egypt; and the famine shall consume the land." (verse 30)
But Joseph had a plan. Starting in verse 34, "Let Pharoah do this, and let him appoint officers over the land, and take up the fifth part of the land of Egypt in the seven plenteous years. And let them gather all the food of those good years that come, and lay up corn (a generic word for any grain) under the hand of Pharaoh, and let them keep food in the cities. And that food shall be fore store to the land against the seven years of famine ... that the land shall not perish." (Underlining mine)
What happened? REQUISITE "OFFERINGS" TO PHARAOH, ESSENTIALLY TAXES, WERE CUT FROM 100% TO 20%. The populace was allowed to keep more of what they earned. And what happened? Plenty. Plenty happened! They had incentive to make more corn!
And Joseph was made CEO, CFO and CIO over all the land. Verse 41 - "I have set thee over all the land of Egypt." And the economy boomed. And Joseph also got some great jewelry and fine linens out of the deal, and a bottomless debit card accepted everywhere.
When has a tax cut not done this? This is not paradoxical at all! Let him hear who has ears to hear...