Several Republicans have claimed (for example Sen. Jon Kyl and Rep. Paul Ryan) that the tax cuts they proposed do not require offsets. Their claim seems to be that the cuts pay for themselves (the Supply Sider position). So if cutting taxes say 10% will generate the economic activity to raise tax revenues to offset the losses, does that mean that cutting taxes 100% generates the kind of economic activity to raise tax revenue offsetting the tax cut? In other words, zero taxes would generate maximum revenues?
Of course, this shows the flaw in their logic. At some point tax cuts will not raise overall tax revenue enough to offset the losses from the cuts. Research has shown that this is the current situation.
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