It's a recurring promise: cut tax rates, growth speeds up, and the resulting bigger pie produces more revenue than the old higher rate. The story has political appeal in every country that's tried it. The data, four decades on, has a more sober verdict.
The clearest natural experiment is the United States since 1981. The Reagan, Bush, and Trump tax cuts each lowered top marginal rates substantially. In every case, federal receipts as a share of GDP declined or stayed flat — not because growth didn't respond, but because it didn't respond enough to outweigh the lower rate. The Congressional Budget Office and the Joint Committee on Taxation, scoring across administrations, find the same: real-world revenue feedback typically recovers 10–35% of the static cost of a rate cut, not 100%+.
There are exceptions. Cuts to extremely high rates — above ~70% — sometimes show stronger feedback because behaviour was being heavily distorted at the top end. Cuts on capital gains, where realization timing is flexible, can also raise short-term revenue. But most modern tax debates concern rates well below those thresholds, where the Laffer-curve argument applies far more weakly.
Tax cuts can still be good policy on other grounds — efficiency, fairness, the size of government people want. But the claim that they costlessly fund themselves is one of the most well-tested in modern economics, and the test has not been kind.