I'm reading "Principle of Economics" by Mankiw. In Part III Market and Welfare, Ch 8 "Application: the costs of taxation", it says:
Only 32% of a cut in U.S. labor taxes would be self-financed, the economists note, versus 54% self-financing in Europe. Just over 50% of a cut in U.S. capital taxes would pay for itself, the authors estimate, versus 79% in Europe.
But what does it mean by a tax cut be "self-financing"?
self-financing adj (of a student, business, etc.) financing oneself or itself without external grants or aid
So "self-financing" means someone can sustain without external aid. I just could not get it what a tax needs to be "self-financing"