[ChessExpert]

"The "free lunch" that I referred to is the belief that cuts in the top marginal rate in the current 30 to 40 percent range will pay for themselves."

This can be argued in the context of the Laffer curve by saying that the 30 to 40 percent range is close to point A shown in post 5. The Laffer curve, and supply siders, do not deny point A, they affirm it. At some point, tax rates are too low to generate maximum government revenues.

"Every one of Bush's budget documents that has addressed the matter has projected that the tax cuts will cause revenues to be lower, at least in the short to mid-term (the long-term is not projected)."

I think the problem here is that almost all analysts simply "run the numbers." Someone goes to their spreadsheet, reduces a tax rate factor and tax revenues go down correspondingly. If you double the rate, you double the revenue. It would be like going to a car dealer's spreadsheet, doubling unit price, and computing a doubling of revenues.

[remember]

This can be argued in the context of the Laffer curve by saying that the 30 to 40 percent range is close to point A shown in post 5. The Laffer curve, and supply siders, do not deny point A, they affirm it. At some point, tax rates are too low to generate maximum government revenues.

I agree. However, any supply-sider who argues that the Bush tax cut increased revenues would presumably believe that we are closer to point B.

I think the problem here is that almost all analysts simply "run the numbers." Someone goes to their spreadsheet, reduces a tax rate factor and tax revenues go down correspondingly. If you double the rate, you double the revenue. It would be like going to a car dealer's spreadsheet, doubling unit price, and computing a doubling of revenues.

I do know that the government's process of "running the numbers" is much more accurate than simply doubling the revenues to estimate the result of a doubling of the tax rate. For example, the following graph shows the results of a CBO study that estimated the cost of Bush's 2004 budget proposals using the conventional "running of the numbers" and various supply-side models:

As you can see, there was not that huge of a difference. In any case, the actual numbers and sources can be seen at http://home.att.net/~rdavis2/cbobud04.html