The same thing is true on the other end of the spectrum. It's true that taxes can become prohibitively high, which effectively stifles economic activity. When taxes are too high and resulting in dead weight loss, a decrease in the tax burden can increase economic activity and actually generate more tax revenue. But past a certain point, that doesn't hold true. When economic activity isn't being suppressed by exorbitantly high taxes, there is little benefit to decreasing taxes. It actually has unintended consequences like encouraging hoarding and/or speculation. The multiplier on tax cuts is often below one... meaning, for every dollar of taxes that is cut, it stimulates less than one dollar of economic activity. In that case, lowering taxes will not increase revenue, either...
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