[ConstantineX]

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Supply-side theory is clearly plausible, but what any particular economy would have done absent a tax cut cant be proven, because there is no control.

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It cannot be proven, but it can be reasonably estimated, and that estimate is going to be a hell of a lot more plausible than supply side theory. We have plenty of historical data showing how tax receipts grow naturally from year to year even without change in policy. Supply-side theory is plausible only in theory, which is why it wont't die.

Anyone who says that tax cuts increase revenue, because 2007 tax receipts are greater than 2000 tax receipts (or something of that nature), is for certain full of [censored]. Any argument which compares 2000 tax dollars to 2007 tax dollars without even mentioning adjusting the numbers to the same basis is meant to deceive, not to be meaningful.

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If you use a CPI deflator, you still get a persistent increase in tax revenues compared to predicted levels. If you look at the data, it CLEARLY shows this for the Bush tax cuts for capital gains where tax revenue has ballooned.

Their is definitely some BS employed by supply side economists though. Their main [censored] claim is that supply side cuts "pay for themselves". Of course this is handy politically, because it implies that there's a free lunch in a populist stance, whilst spending can continue. But it's not all BS - prominent economists have established and calculated and found "clawback" factors that figure in to how much a tax cut will actually cost in terms of lost revenue to the government. I think either Greg Mankiw or Feldstein at Harvard estimated it to be $0.24 cents per dollar of revenue foregone, which is still QUITE an amount. But it's not a free lunch. Eventually, however, with higher economic growth, the tax cut will "pay for itself" - if spending doesn't rise concordantly with GDP growth. Of course, it all depends on the time scale one uses to judge "paying for itself".

That's not to say there isn't the same sort of hypocrisy amongst liberals. Liberal thinkers (let's not pigeonhole everyone, let's just say the prominent POLITICAL ones) are usually Keynsians, who believe the government can spur aggregate demand when its fallen below "normal" levels, and that this growth in government spending has a "multiplier" effect - that is, when you increase consumption a little bit (via government purchases, like dumping airplanes in the Atlantic), people respond and increase investment a little bit, increasing consumption some more, in a feedback loop that multiplies the total investment. So most liberals defend government spending in that way. Yet they refuse to entertain the idea of a similar multiplier effect on the supply side, shifting the supply curve outward by more than "nominally" (that is, the initial decrease of the tax cut).

I find the liberal argument about tax cuts for the "rich" a little bit founded too. It's patently unfair that we have differing tax rates for capital gains and income, especially since the rich have much more of their disposal income in capital than wages, which they use to great extent in the form of stock options and bizarre partnerships that structure their incomes in such a manner. If you judge the morality of earning from capital and income as different (which I don't), it makes it even egregiously unfair. Of course, the answer is to just levy a flat consumption tax on everyone, and then voucher away for the needy...but that's not politically palatable, and thus will never happen.