A statistic I recently read in the poorly titled book “The End of Prosperity” has helped to convince me that the answer is no. (The book is not as depressing as the title, instead of talking about an end to prosperity it is more of an apologetic for supply-side economics, with a focus on the history of economic policies and their effects. Surprisingly readable for a book on economics.)
It said that under the Bush tax cuts of 2003, (which I believe primarily applied to top earners such as business owners, the investor class and the like) federal tax revenues increased from 2004 to 2007 by about $785 billion. According to the book this was the largest four year tax revenue increase in American history. I think the author’s make a good case for there being a causal connection here, at least to some extent. On a side note I found it noteworthy when reading it that this is about the amount of money that Obama’s stimulus package is said to cost. Now I realize it is unpopular to say positive things about policies of Bush’s such as his tax cuts, but leaving personal feelings about Bush aside, if the tax cuts helped to increase tax revenue (by lessening the incentive to engage in tax evasion and quite possibly by helping the economy to grow) by such a notable amount then doesn’t it make sense to think that raising taxes on top earners or letting such tax cuts expire would have an opposite effect on tax revenues?