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The question I have is that at some point X taxes are collected and the economy is growing at Y, then the policies change and now X-5 taxes are collected and the economy grows at Y. What was the function of the 5 under the first regime?

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Slowing the growth of the country’s debt. Some would argue this gives flexibility to expand that debt during crises like wars, economic events, or pandemics; by “keeping powder dry” in terms of debt to GDP.

Are you thinking specifically of the US or you thinking of all the countries that were part of the data they reviewed? Also, how does leaving the wealth in the hands of citizens prevent it from being taxed in the future if needs be?

I’m thinking specifically of the US, but I don’t see why the same argument wouldn’t apply to most countries. There’s going to be differences when you get to weird economies like North Korea, but still.

Not taxing the citizens now gives you more room to tax them in the future. Or looking at it another way, cutting those currently implemented taxes can act as a stimulus for the economy, although one with poor measurability compared to other types of stimulus.

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