Did high taxes cause European unemployment?

—His tax cuts were followed by big economic growth (as were JFK’s tax cuts). I see less significance to whether the amount of growth matched some particular estimates. Your point sounds like it came from someone looking for an excuse to discredit the Reagan economic success. Do you have a cite?—

Uh, I think the cite here is yours. My main point was that its very hard to say whether a specific government policy was the cause of anything, because there are so many other competing effects. Honestly, dec, almost no one believes that the high growth period in post 82 was due to anything Regan did: it was due to what the Fed did. Further, the growth was almost all due to the re-filling of capacity after a recession: the long term real growth (i.e., actually increasing full capacity) that the tax cuts were supposed to affect never materialized. But that doesn’t prove that the tax cuts didn’t PREVENT growth from being worse. The final estimate is that we’re still not sure. I was making a point about how hard it is to figure out what would have happened without a policy, not a point about Regan.

Labor is a commodity, and like any commodity loses buyers when the price goes up. Taxes that raise the cost of hiring cause hiring to drop. If the extra tax revenue provides an added value through improved infrastructre, increased productivity (through training), etc. then this can be offset. If you trust your government to pull this off you should be in favor of higher taxes, otherwise not.