Common sense. Lets say you previously was paying 30% taxes on your (e.g.) 10k annual income - $3000. Taxes get reduced to 25%. So, the next year you have an

Common sense. Lets say you previously was paying 30% taxes on your (e.g.) 10k annual income - $3000. Taxes get reduced to 25%. So, the next year you have an extra $500 in your pocket and not in the goverment treasury. Where does that $500 go? One or two places. You either 1) spend it on something or 2) invest it in something (which will result in that getting spent by the entity "borrowing" it). > I want to know why you think this is the case? I have had to raise the wages paid by my business to retain employees due to other businesses in my industry raising their wages. No research needed for these two thoughts. Direct observation and application of logic.