Even with its imperfections, the tax rate cut had done what Mellon had predicted: the tax rates had dropped 25 percent, yet the decrease in the amount received was less than 5 percent. It was wondrous: there might be a federal budget surplus despite the bonus costs imposed by the new bonus law, just as Senator Bursum, just defeated, had predicted long before. The stock market increase was the market’s way of telling the administration that it already counted on the tax cut and counted on the economy thriving in coming years.
