In other words, federal taxes would be cut by less than four cents of every tax dollar collected. More important, in the first few years the tax cuts are imperceptible. In 2000, Americans' taxes would be cut by 0.4 percent, in 2001 by 0.9 percent, in 2002 by 1.8 percent. The tax cuts are not scheduled to start providing real tax relief until the next two presidential elections have passed. That is a modest tax sliver, not a gigantic tax cut.
Tax cuts risk a return to high inflation and high interest rates.
Still this remains the White House's favorite mantra. Apparently, Clinton hasn't bothered to read his own Economic Report of the President. In that report, one finds statistics showing that after the Reagan tax cuts in 1981, interest rates and inflation didn't rise, they plummeted. The inflation rate was 11 percent in 1980 and by 1985 it had fallen to below 4 percent. In 1980 mortgage interest rates were 15 percent, but five years after the Reagan tax cuts, they were down to 7 percent.