Financial Times FT.com

Bush believes higher revenues vindicate tax cuts

By Krishna Guha and Holly Yeager

Published: July 18 2006 19:43 | Last updated: July 18 2006 19:43

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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