It is difficult to make sense of politics at times, especially when it comes to economics. The 2017 Republican Tax Cut is supposed to cut taxes, but increase revenues. Many focus on distributional concerns, This post is about the feasibility of cutting taxes and without increasing the deficit, implying that revenues must stay at least neutral. How is it possible? Only if income goes up sharply, so that a lower tax on a larger tax base (income) does not affect revenues.
Economic Growth theory, suggests this is actually possible. Think about it this way: If there were no taxes there would be no funds to provide public goods (education, roads) crucially needed for prosperity. so we know that taxes must be positive even for low levels of income. On the other hand, the tax rate also cannot be linear (increasing with income) because prohibitive taxes (100%) would provide no incentives to work as income rises. So, the optimal tax is rising to a certain level and then declines again, inverted U curve. The question is what determines the maximum and is an economy to the left of the right or the maximum where taxes should either increase or decrease to foster growth.
In a sense this is an empirical question and is easily answered. The Kennedy/Johnson Reduction Act cut income tax rates across the board and reduced the corporate tax rate. Revenues increased. The Reagan and Bush tax cuts had opposite effects Economic Recovery Tax Act of 1981 cut the top marginal tax rates from 70% to 50% and the bottom rate from 14% to 11% in addition to cutting capital gains, estate and corporate taxes. Under the Tax Reform Act of 1986, the top marginal tax rates were reduced further (from 50% to 28%) and increased the bottom rates from 11% to 15% (in other words, taxes on the lowest earners were raised to 1% higher than when Reagan stepped into office.
Recently Kansas tried the same experiment by lowering taxes dramatically in 2012. NPR has a summary of the effects that is well worth listening to.