Do Tax Rate Cuts Really Work ?? (Part 2)

A detailed explanation of the probable cause of the current economic expansion:

Tne lesson in all of this is that not all tax cuts are created equal. Tax rebates and other temporary measures aimed at stimulating consumer demand don't work. Consumers aren't irrelevant, but prosperity is created on the supply side of the economy with the incentives to produce goods or services that people want to consume. So tax cuts in marginal rates that boost incentives to work and invest provide a much bigger bang for the buck.

Ronald Reagan once quipped that he knew his policies were working when his critics stopped calling them "Reaganomics." And so it goes this time as well. The same critics who said the tax cuts wouldn't work are now saying those cuts had nothing to do with our current expansion. They want to give all the credit to monetary policy, or dismiss this as another case of a Keynesian, demand-side boom. Certainly monetary policy has played a role, especially in sustaining housing and consumer spending. But monetary easing did little to revive corporate investment, which remained stagnant throughout 2002.

Read the whole article here.
More research on tax rate cuts can be found here and here.