Study showed link of tax cuts, stimulus

Regarding Paul Krugman’s column, “No correlation between tax cuts, economic growth” (Opinion, Oct. 5), there is plenty of proof tax cuts stimulate the economy. The Joint Economic Committee of Congress in 1996 issued the following statement on the subject of President Reagan’s tax cuts which shows Krugman to be totally wrong:

“First of all, reduction in high marginal tax rates can induce taxpayers to lessen their reliance on tax shelters and tax avoidance, and expose more of their income to taxation. The result in this case was a 51 percent increase in real tax payments by the top 1 percent. Meanwhile, the tax rate reduction reduced the tax payments of middleclass and poor taxpayers. The net effect was a marked shift in the tax burden toward the top 1 percent amounting to about 10 percentage points. Lower top marginal tax rates had encouraged these taxpayers to generate more taxable income.”

Look at any graph contrasting the top marginal tax rate versus actual tax revenue to the government, and you will see this statement to be true. As a business owner, if my taxes go down, I am going to use that money to grow my company to make more money.

What planet does Paul Krugman live on?

— BRIAN WILSON, ATLANTA