Tax Cuts on the Rich Don't Spur Economic Growth

Date Published: 
Fri, 09/12/2008

Michael Ettlinger and John Irons. Center for American Progress. September 12, 2008.

"Take a Walk on the Wild Side" debunks the supply-side myth -- that lower tax rates on the wealthy and corporations will necessarily lead to higher economic growth. There is little, if any, correlation between supply-side economics and the benefits that its proponents promise.

The authors disprove this theory by comparing a variety of different economic indicators following the supply-side cuts of 1981 and 2003, and the Clinton tax hikes of 1993. To take two examples: employment growth was much greater after the Clinton hikes than after either tax cut, and the deficit vanished after the Clinton hikes, while it exploded after both rounds of tax cuts.