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Less is more? Why Bush sees higher revenues as vindicating his tax cuts

By Krishna Guha and Holly Yeager

Published: July 19 2006 03:00 | Last updated: July 19 2006 03:00

Dick Cheney and Donald Rumsfeld may not instantly have realised it. But when, back in 1974, they dined with the economist Arthur Laffer at the Two Continents restaurant in Washington DC, they were witness to a moment of economic history.

Mr Laffer sketched on a napkin his now-famous theory that tax revenues could rise if taxation rates were cut.

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