Take the Supply-Side Economics Test!

The core idea behind Supply-Side Economics is that tax cuts create growth in the economy. Following from that theory, one could make the argument that some tax cuts are “revenue neutral” because even though the tax rate is lower, the lower rate on a bigger economy means that the same amount of net revenue is collected. If this were true you could cut taxes without increasing the national debt, so a tax cut is “fiscally conservative”.

Since the 1980s, Supply-Side Economics has been the Republican Party’s orthodoxy regarding tax policy. In any gathering of Republicans it is taken as proven that tax cuts increase economic growth, and tax increases cause economic stagnation (or recession!)

Let’s look at the actual data. The following chart represents the GDP of the United States over a fixed amount of time, ending with the present. Because the Great Recession sent such a strong signal, it would be too easy to date this graph by Presidential administration using that disruption; therefore this graph starts at an arbitrary year after the Recession ends. [Originally I intended to update this graph as time passed, but the effects of COVID19 are so strong that it would be easy to date this graph by that recession. So I’m going to leave this data set to the original interval forever.]

Your challenge: Make a copy of this graph, and draw lines on it when you think the government lowered taxes, and when it raised taxes, in meaningful amounts (in other words, don’t try to mark every tax increase or decrease…