* The claim seemed paradoxical, since I knew that Reagan's tax cuts resulted in a 20% fall of revenue/GDP and GDP growth slowed under Reagan, owing to slower inflation incident to falling oil prices as OPEC lost discipline (see Reagan's legacy ).
* In fact, there was a 5x increase in revenue from returns reporting more than $200k due to inflation, not tax cuts. The number of returns reporting more than $200k increased 6x because of the 40% inflation between 1980 and 1988 together with the bell shape of the income distribution curve (concave up at the high end). In 1980, only 0.12% of returns reported incomes exceeding $200k, this being 3 standard deviations above the mean (see Standard deviation diagram ). The 40% inflation then spread the distribution rightward so that $200k fell about 2.2 standard deviations above the mean, with about 1.4% of returns expected to report income above $200k. Said another way, in 1980 there was a pool of incomes just below $200k that was more than 10 times the total above $200k. Inflation pushed about 1/2 of that pool above $200k.
* Thus, contrary to claims of the Reaganistic economists, the increased revenue from returns reporting more than $200k income was due to inflation, not due to tax cuts. Had Mitchell carried out a similar analysis on the years from 1972 to 1980, with $100k as the cutoff point, he would have seen a more amazing increase of revenues from incomes above $100k, since the CPI doubled between 1972 and 1980.
* We could learn much about the matter at hand if income-distribution curves were available for the beginning and end of every presidency beginning back in the 1950s.
