Tax cuts can boost revenue by stimulating job creation and economic growth

See Europe Settles Some Tax Scores: Finally, glimmers of a new old way to account for tax cuts and growth. WSJ editorial. Excerpt:

"A new paper in the Journal of Policy Analysis and Management aims to bring the dynamic method to Europe. Economists from the European Commission and the IFO Institute, a German think tank, combine elements of two economic models already used by policy makers to create the first major dynamic-scoring model for the whole EU. By simulating a tax-rate cut in Belgium as an experiment, they find that tax cuts can boost revenue by stimulating job creation and economic growth.

An important virtue is that their model can estimate different effects from cutting or raising different kinds of taxes. In their Belgian hypothetical, they examine social-welfare payroll taxes and find that revenue and employment changes depend on whether one cuts the employer or employee portion. Such insights come not a moment too soon as Europe faces mounting dangers of an economic slowdown."