The first thing to note about recessions and recoveries is that they have nothing to do with tax.
Cutting taxes and running a deficit doesn't reduce the cost of government expenditure; it merely puts off the reckoning of who bears the cost of that expenditure.
Running a deficit during a recession can be a good thing because the lower taxes and higher government spending that it implies can boost aggregate demand for goods and services and get the economy to put its existing productive capacity back to work. But budget deficit erodes investment. I+CA=Sg+Sp.
Some who favor tax cuts do so in part because they hope that the lower revenue, and the deficits that accompany it, will put pressure on Congress to restrain its spending. "Starve-the-beast" strategy
Whether tax cuts will eventually effectively restrain government spending is totally an empirical question. Recent history actually shows an inverse relation. \
No simple relationship or single graph can establish how the tax system affects economic prosperity or growth.
A preponderance of evidence suggests that male hours worked respond hardly at all to changes in after-tax wage rates.
Tax on the returns to saving and business investment distort the choices of individuals, encouraging people to consume more today and save less for the future than they otherwise would.
Identifying which goods and services are more or less responsive to taxation is difficult. Even if economists could measure such things accurately, differentiating taxes according to this approach often conflicts with both equity and simplicity. Politicians are unlikely to distinguish among goods based solely on their price sensitivity.
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