This chart shows the level of Personal Income Taxes collected, in relation to the S&P 500.
Notice the relationship: Tax collections are dependent on the stock market, and collections lag gains or losses by about 1 year.
After the Bush tax cuts, tax receipts are more efficiently tied to the market, which demonstrates that the current tax rates are closer to optimum than during the Clinton years. Contrary to popular opinion, this verifies the principles of the Laffer curve and 'Supply Side' economics. Even after cuts in tax rates, tax revenues increased. Tax cuts are beneficial to the economy. Deficits are caused by excessive spending.
