July 2, 2011
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I’d written before that if Ronald Reagan ran for president, he wouldn’t make it our of the Republican primaries these days. Why? Because of his stance on taxes. You see, for all the railing today’s GOP is doing about no tax increases or ending of tax breaks, what gets overlooked is Reagan’s overall record on taxes and revenue.
Surely we’ve all heard that Reagan cut taxes. The storyline goes “Reagan cut taxes and the economy grew.” But therein lies some serious policy omission. After a massive tax rate cut in 1981, Reagan along with Congress (which included a Republican-led Senate) proceeded to pass a number of measures designed to raise revenue. Any of those measures would be criticized today as tax increases.
I’d been surprised that little has been said about this. But finally, an article in Politico spells it out:
The Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) is the most famous, because of its historic size and timing, a dramatic course correction that quickly followed Reagan’s signature income tax cuts in 1981. But in the six years after were four more deficit-reduction acts, which combined to almost double TEFRA’s revenue impact on an annual basis.
Translated into current dollars, the total revenue increases for the five bills would then be equal to about $190 billion a year. That’s far in excess of anything that has been proposed by the White House in recent deficit talks led by Vice President Joseph Biden, yet most of these increases were approved when Republicans controlled the Senate in the 1980’s.
Democrats could really bash Republicans’ heads with this. Instead of the insipid arguments we keep hearing about “tax breaks for millionaires and billionaires” and “tax breaks for Big Oil” a simple tack of “well, Reagan did it” would be nearly impossible for Republicans to counter. After all, Reagan is patron saint of conservatism.