What is the theory called that states that cutting taxes increases government revenue?

I saw the question on jeopardy a few days ago but I can't remember what it was. It seemed like the theory was named after someone but I'm not sure.I know it wasn't the trickle-down theory.I've tried to find it on google but can't.Can someone help me!?

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  • Anonymous
    1 decade ago
    Favorite Answer

    Cutting INCOME taxes on the wealthiest Americans has historically increased government tax revenues overall as they are more likely to invest/trade with that money and thereby incur capital gains taxes which are at a much higher rate than income taxes.

    It isn't a theory, it is a phenomenon.

  • Anonymous
    1 decade ago

    Try googling Arthur Laffer or Supply Side Economics.

  • 1 decade ago

    Ronald Reagan's trickle down theory that doesn't work.

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