Let me explain this numerically.
Let's say the economy is worth $1 million and the tax rate is 30%. That means the the tax take is $300,000. If you cut the rate of tax to 20%, the tax take will be $200,000. To get to the previous $300,000 in tax revenue just to break even, the economy must grow by 50% to $1.5 million to get the same tax revenue of $300,000. The nominal rate of growth in this country is about 6%-7%. That means you would have, at a minimum, 7 years of economic growth to get back to where you started. You would have had to have enormous growth that has never been seen in this country just to make the tax cuts revenue neutral. This is why Reagan raised taxes after he cut them so drastically. (And reformed the tax system, which was excellent legislation.)
Now, understand, given where the economy was at the time - or at least where we thought it was - there was nothing wrong with the tax cuts. If the government is attempting to implement counter-cyclical measures, I generally think tax cuts are better than increased government spending. Not always, but generally. But what the government should have done once we came out of the recession was to either re-implement the taxes or cut spending. It has done neither. And that is after 4 years of the Republicans controlling everything, which is why I say they have been so reckless with the budget. It is one reason why I have become so disenchanted with the Republican party.
The problem I have is with the argument that because Bush cut taxes, government revenues are higher. Of the increase in tax revenues, there will have been a marginal effect on higher government revenues. But the deficit has grown at a much faster pace than 6.7%. And there would have been even faster growth in government revenue had taxes been raised.
