Reagan and Taxes

[RunInRed 16,487]

Reagan consistently publicly favored lower taxes and this has evolved into the mantra of the right...did he really practice what he preached?

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http://www.freerepublic.com/focus/f-news/1153345/posts

In 1982 alone, he signed into law not one but two major tax increases. The Tax Equity and Fiscal Responsibility Act (TEFRA) raised taxes by $37.5 billion per year and the Highway Revenue Act raised the gasoline tax by another $3.3 billion.

According to a recent Treasury Department study, TEFRA alone raised taxes by almost 1 percent of the gross domestic product, making it the largest peacetime tax increase in American history. An increase of similar magnitude today would raise more than $100 billion per year.

In 1983, Reagan signed legislation raising the Social Security tax rate. This is a tax increase that lives with us still, since it initiated automatic increases in the taxable wage base. As a consequence, those with moderately high earnings see their payroll taxes rise every single year.

In 1984, Reagan signed another big tax increase in the Deficit Reduction Act. This raised taxes by $18 billion per year or 0.4 percent of GDP. A similar-sized tax increase today would be about $44 billion.

The Consolidated Omnibus Budget Reconciliation Act of 1985 raised taxes yet again. Even the Tax Reform Act of 1986, which was designed to be revenue-neutral, contained a net tax increase in its first 2 years. And the Omnibus Budget Reconciliation Act of 1987 raised taxes still more.

The year 1988 appears to be the only year of the Reagan presidency, other than the first, in which taxes were not raised legislatively. Of course, previous tax increases remained in effect. According to a table in the 1990 budget, the net effect of all these tax increases was to raise taxes by $164 billion in 1992, or 2.6 percent of GDP. This is equivalent to almost $300 billion in today's economy.

[AURaptor 1,126]

http://www.wnd.com/news/article.asp?ARTICLE_ID=22108

Fact: Interest rates eased after Reagan slashed tax rates.

The long-bond yield was 13.45 percent in 1981. By the time Reagan left office in 1989, it had dropped to 8.45 percent. Mortgage rates fell from 14.70 percent to 10.13 percent over the same period.

Fact: Inflation cooled.

In the year before Reagan's tax cuts took effect, the annual rate of consumer inflation was 13.5 percent. In the first year of his tax cut, 1981, inflation was 10.3 percent. In the second year, it was 6.2 percent. By the third and final year, 1983, inflation had dropped to 3.2 percent. When Reagan left office, inflation stood at a tame 4.8 percent.

Fact: The economy reached full employment.

Before Reagan's full tax-relief package took effect, the jobless rate hit 9.6 percent. But as tax cuts worked their magic in the economy, unemployment dropped every year after 1983, reaching a low of 5.3 percent in 1989.

Tax cuts benefited minorities, too. The jobless rate among blacks plunged from 19.5 percent in 1983 to 11.4 percent in 1989.

Fact: Government revenues nearly doubled after Reagan's sweeping tax cuts.

Before his 25 percent across-the-board cut in individual income-tax rates went into effect, government receipts from individual income taxes trickled in at $244.1 billion. The year Reagan left office, they totaled $445.7 billion -- an 82 percent jump.

In the tax-hiking, supposedly "fiscally responsible" '90s, by comparison, individual tax receipts rose a comparable 86 percent.

More key, individual tax receipts grew at a compound annual rate of 6.9 percent from 1980 to 1989 (compared with a 7.1 percent rate from 1990 to 1999).

Meanwhile, however, federal outlays grew at a faster 7.6 percent compound annual clip from 1980 to 1989, causing the yawning budget gaps.

The problem, you see, was spending, not tax cuts -- a distinction the intellectually dishonest redistributionists on the left fail to make when they cluck about the skyrocketing deficits and mounting debt under Reagan.

And for that, Democrats share the blame.

Yes, Reagan ballooned defense spending. But Democrats, who controlled appropriations back then, refused to give him the corresponding cuts in other domestic programs -- and instead increased spending.

In fact, the Democrat Congress outspent every one of the nine budgets Reagan proposed, but one.

This is what Treasury Secretary Paul O'Neill meant when he recently said, "we put ourselves in a ditch that was horrendous."

Daschle, House Minority Leader Dick Gephardt and the other class warriors in their party have taken O'Neill's comments out of context to make it sound like he was bashing the Reagan tax cuts.

In testifying before Congress last month, O'Neill discussed the 1981 budget deal and budget deficits. Here's the full text:

"You know, I was outside the government when all of that transpired, and it was actually clear to me that what was going to happen was in the cards. And maybe you weren't here, but other members were here," he said, responding to a question from a Democrat.

"This was the year of the famous flying asterisks, when we had $42 billion worth of unidentified budget reductions that no one ever put together," he added. "And as a consequence of enacting the [tax] side without dealing with the spending side, we put ourselves in a ditch that was horrendous."

Sounds to me like O'Neill was OK with the tax cuts, so long as they came with corresponding budget cuts.

But Democrats have twisted the quote into a disclaimer of tax cuts by the top financial member of Bush's cabinet.

Speaking of the Reagan tax cuts last month, Daschle said, "It was a huge mistake. As President Bush's own treasury secretary, Paul O'Neill, said recently, it put America 'in a ditch that was horrendous.'"

If there were laws against it, Daschle would be guilty of intellectual malpractice.

It's the height of irresponsibility for an elected official of such high stature to spout such disingenuous and demagogic rhetoric (which, it should be noted, has passed largely undigested through the tax-loving, Reagan-hating Washington media).

In revising history, Daschle is counting on average Americans -- who don't have historic data at their fingertips, or don't know where to go to find them -- to have short memories.

Politicians who have to go to such lengths to distort the record of an opposing fiscal policy -- in this case, supply-side economics and laissez-faire government -- must be trying to fool people about the merits of their own policies. This is exactly what the central planners in Moscow did, and what Beijing's planners are still doing.

It's called propaganda. Isn't it funny how those with the worst arguments make the best propagandists?

But, as Reagan said, facts are stubborn things. And they'll survive propaganda.

[RunInRed 16,487]

So did Reagan raise taxes or not? "Simple Question"

[AURaptor 1,126]

So did Reagan raise taxes or not? "Simple Question"

Sorry, not a simple question. He did both. But by far the bigger impact was what he cut, not what he raised.

[RunInRed 16,487]

Guess there's more than 1 way to skin a cat. This whole tax issue is not as cut (no pun intended) and dry as Republicans like to make it appear. BO raised the better question: tax cuts for who, tax hikes for who? That is the real issue.

[AURaptor 1,126]

Guess there's more than 1 way to skin a cat. This whole tax issue is not as cut (no pun intended) and dry as Republicans like to make it appear. BO raised the better question: tax cuts for who, tax hikes for who? That is the real issue.

I guess one needs only to look at the facts.

*Before his 25 percent across-the-board cut in individual income-tax rates went into effect, government receipts from individual income taxes trickled in at $244.1 billion. The year Reagan left office, they totaled $445.7 billion -- an 82 percent jump. *

[AFTiger 282]

Guess there's more than 1 way to skin a cat. This whole tax issue is not as cut (no pun intended) and dry as Republicans like to make it appear. BO raised the better question: tax cuts for who, tax hikes for who? That is the real issue.

Easy answer; cut taxes for taxpayers.

[RunInRed 16,487]

Guess there's more than 1 way to skin a cat. This whole tax issue is not as cut (no pun intended) and dry as Republicans like to make it appear. BO raised the better question: tax cuts for who, tax hikes for who? That is the real issue.

Easy answer; cut taxes for taxpayers.

Ok...I'll go along with your philosophy of tax cuts for all. But then the question is raised...if you cut taxes and decrease revenues - what services do you also cut? This is this is the question Bush never quite figured out how to answer - which is why, we have 5-6 Trillion worth of National Debt now.

[RunInRed 16,487]

Guess there's more than 1 way to skin a cat. This whole tax issue is not as cut (no pun intended) and dry as Republicans like to make it appear. BO raised the better question: tax cuts for who, tax hikes for who? That is the real issue.

I guess one needs only to look at the facts.

*Before his 25 percent across-the-board cut in individual income-tax rates went into effect, government receipts from individual income taxes trickled in at $244.1 billion. The year Reagan left office, they totaled $445.7 billion -- an 82 percent jump. *

You can pick stats out of the sky to justify your fiscal position all day long. I'm sure I could come up with some pretty good looking stats from Clinton in the 90s as well. But that still doesn't answer the question - tax cuts for who and tax hikes for who. Or the bigger issue - if you cut taxes, what services do you cut?

[AURaptor 1,126]

Guess there's more than 1 way to skin a cat. This whole tax issue is not as cut (no pun intended) and dry as Republicans like to make it appear. BO raised the better question: tax cuts for who, tax hikes for who? That is the real issue.

I guess one needs only to look at the facts.

*Before his 25 percent across-the-board cut in individual income-tax rates went into effect, government receipts from individual income taxes trickled in at $244.1 billion. The year Reagan left office, they totaled $445.7 billion -- an 82 percent jump. *

You can pick stats out of the sky to justify your fiscal position all day long. I'm sure I could come up with some pretty good looking stats from Clinton in the 90s as well. But that still doesn't answer the question - tax cuts for who and tax hikes for who. Or the bigger issue - if you cut taxes, what services do you cut?

Yes, if they actually happened, I CAN pick stats out of the sky to justify my fiscal position. Glad we see eye to eye on something.

[RunInRed 16,487]

Since you asked for stats on Clinton and the 90s:

Average economic growth of 4.0 percent per year, compared to average growth of 2.8 percent during the previous years. The economy grew for 116 consecutive months, the most in history.[29]

Creation of more than 22.5 million jobs—the most jobs ever created under a single administration, and more than were created in the previous 12 years. Of the total new jobs, 20.7 million, or 92 percent, were in the private sector.[30]

Economic gains spurred an increase in family incomes for all Americans. Since 1993, real median family income increased by $6,338, from $42,612 in 1993 to $48,950 in 1999 (in 1999 dollars).[31]

Overall unemployment dropped to the lowest level in more than 30 years, down from 6.9 percent in 1993 to just 4.0 percent in January 2001. The unemployment rate was below 5 percent for 40 consecutive months.

Unemployment for African Americans fell from 14.2 percent in 1992 to 7.3 percent in 2000, the lowest rate on record. Unemployment for Hispanics fell from 11.8 percent in October 1992 to 5.0 percent in 2000, also the lowest rate on record.[30]

Inflation dropped to its lowest rate since the Kennedy Administration, averaging 2.5 percent, and fell from 4.7 percent during the previous administration.[32]

The homeownership rate reached 67.7 percent near the end of the Clinton administration, the highest rate on record. In contrast, the homeownership rate fell from 65.6 percent in the first quarter of 1981 to 63.7 percent in the first quarter of 1993.[33]

The poverty rate also declined from 15.1 percent in 1993 to 11.8 percent in 1999, the largest six-year drop in poverty in nearly 30 years. This left 7 million fewer people in poverty than there were in 1993.[34]

The surplus in fiscal year 2000 was $237 billion—the third consecutive surplus and the largest surplus ever.[33]

Clinton worked with the Republican-led Congress to enact welfare reform. As a result, welfare rolls dropped dramatically and were the lowest since 1969. Between January 1993 and September of 1999, the number of welfare recipients dropped by 7.5 million (a 53 percent decline) to 6.6 million. In comparison, between 1981-1992, the number of welfare recipients increased by 2.5 million (a 22 percent increase) to 13.6 million people.[35]

[AURaptor 1,126]

I for one did NOT ask for stats on Clinton. i thought this thread was about Reagan.

[Tigermike 3,053]

I for one did NOT ask for stats on Clinton. i thought this thread was about Reagan.

Don't confuse him with facts about threads he started.

[RunInRed 16,487]

I for one did NOT ask for stats on Clinton. i thought this thread was about Reagan.

Well of course it makes sense you wouldn't want to see stats that contradict your position you are trying to espouse. What I posted was totally relevant to the broader discussion of tax policy. If you are going to throw some pie-in-the-sky stat out about Reagan's economic policies, then turn around supporting an opposing position is more than fair debate.

[AURaptor 1,126]

I for one did NOT ask for stats on Clinton. i thought this thread was about Reagan.

Well of course it makes sense you wouldn't want to see stats that contradict your position you are trying to espouse. What I posted was totally relevant to the broader discussion of tax policy. If you are going to throw some pie-in-the-sky stat out about Reagan's economic policies, then turn around supporting an opposing position is more than fair debate.

Son, you're barkin up the wrong tree. The only position I had was that Reagan's tax cuts were real, vast, and they worked. That's not to say some smaller tax increases or rate hikes didn't occur in other areas of the Gov't, but his 1st tax cuts were huge boost to the economy. Clinton's policies need not even be brought into the discussion. if ya just look at the thread title.

[RunInRed 16,487]

Son?

[AURaptor 1,126]

Daughter ?

Regardless, the thread titled 'Reagan and Taxes ' has no mention of Clinton. That is all.