Does lowering taxes result in a net gain or net loss to federal revenues?

Answer 1

If the lowering of taxes resulted in the people in america spending more money and putting more people to work because of the money that was spent on products puts more people to work which increases their expendible income, lowering taxes could actually increase the net gain in federal revenue. The trick is nobody knows where this line is. This theory is outlined by the Laffer Curve.

Answer 2

Lowering the Marginal Tax RATES stimulates the economy, resulting in an increase in Tax REVENUE.

Federal Receipts (Total, in millions of dollars)
2000 2,025,218
2001 1,991,194
2002 1,853,173
2003 1,782,342
2004 1,798,093
2005 2,036,273
2006 (estimated) 2,205,666

It should be noted that receipts for 2006 are running well ABOVE estimate.

Table 1. State and Local Tax Revenue Growth
2000 2001 2002 2003 2004 2005
State 8.8% 0.9% -3.2% 4.2% 8.7% 8.0%
Local 5.9% 4.4% 8.0% 4.8% 7.3% 7.1%
State and local 7.7% 2.2% 1.1% 4.4% 8.1% 7.6%
Source: U.S. Bureau of the Census. Calendar years. 2005 is estimated.

Answer 3

net loss.

Answer 4

The answer depends on whether you are asking a republican or a democrat.

Answer 5

loss they are collecting less money