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Evidence Shows Tax Cuts Lose Revenue

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Publication Date: July 2008

Publisher(s): Center on Budget and Policy Priorities (Washington, D.C.)

Special Collection: John D. and Catherine T. MacArthur Foundation

Topic: Banking and finance (Taxation and tax policy)
Economics (Economic theory)

Keywords: Household income; Income diversity; Tax code; Financial projections

Type: Report


The claim that tax cuts “pay for themselves” — i.e., cause so much economic growth that revenues rise faster than they would have without the tax cut — has been made repeatedly in recent years and is one of the many tax policy issues that is likely to receive renewed attention in light of the upcoming election. This claim is false. The evidence shows clearly that tax cuts lose revenue.