Increasing Tax Rates Does Not Necessarily Lead to Higher Income Tax Receipts
Tax cuts can create incentives for individuals to work, save, and invest, which can generate more revenue. The most dramatic decline in the top individual income tax rate, from 70 percent to 28 percent, occurred during the Reagan Administration, during which tax receipts remained relatively constant as a share of the economy.
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PERCENTAGE OF GDP
Sources: Office of Management and Budget and the Tax Foundation.