Would you believe that raising taxes can reduce government revenue, and reducing taxes can increase it? That was the theory of an economics professor named Laffer. He developed a thing called the Laffer curve that would indicate what result could be expected from raising or lowering taxes.

No serious economist would dispute today the accuracy of the Laffer curve, but that does not mean that everyone is willing to accept the truth. In spite of the fact that in the 1960s President Kennedy lowered taxes and got increased government revenue in return; in spite of the fact that the same thing happened in the 1980s when President Reagan lowered taxes; and in spite of the fact that the same result was obtained with President Bush’s tax cuts; Democrats refuse to acknowledge the truth. That does not mean that they don’t believe the truth. I have no way of knowing what motivates them, but I do know that, except for President Kennedy’s tax cut, when tax cuts are on the table they always cry out that the government is giving away its money to rich folks.

They are doing it again. If the Democrats retain control of Congress they will surely allow President Bush’s tax cuts to lapse. That will amount to the largest tax increase in U.S. history and the consequences will be disastrous. First, thinking that they will be getting extra money from the increased taxes they will increase government spending. When the inevitable happens and government revenue goes down (because of the rise in taxes) Congress will realize that it can’t pay for its new programs and, instead of dropping the programs will raise taxes further in an attempt to pay for them. This, of course, will further reduce revenue, and the downward spiral into recession (or worse) will have started. It would be a very good idea not to trust Democrats with the Congress.