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“So when we have deficit-financed tax cuts there is a trade-off among good and bad effects, not a free lunch,” he said. “That’s why after cutting taxes way too much in 1981, President Reagan subsequently signed 11 bills which raised taxes and recovered nearly 50 percent of the original revenue loss.”

The tax increases, he said, equaled about 2.6 percent of Gross Domestic Product, “which would amount to a $400 billion annual tax increase in today’s economy.”

“Yet the economy grew strongly over those six years not withstanding any negative effects from higher taxes,” he said.