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Both the White House and its supporters are touting the recent increase in federal revenues as a sign that supply side economics works. Contrary to over 30 years of experience and, well... common sense, they see the latest stats as a sign that cutting tax rates does indeed increase revenues. Only one problem. They have no idea what they're talking about.

From today's NYT, an image that's worth a trillion words (click to enlarge):

Notice the plunging revenues under Bush II. Sure thing, there's a recent uptick, but when compared to revenues before his tax cuts were implemented, its not even close.

There is one thing I've always wondered about this debate. If supply-siders were right, then it would seem that in addition to tax cuts increasing revenues, tax increases would have to result in revenue decreases. But no one ever argues that, not even supply-siders. Wouldn't that seem to be a fatal flaw in their argument? Aside from the fact that the entire argument is wrong, of course.

Want more? Brendan Nyhan walks you through the details. And Kevin Drum draws the connection between this and the economic status of the average American worker.