In August 1981, President Reagan signed the Economic Recovery Tax Act of 1981, which brought reductions in individual income tax rates, the expensing of depreciable property, and incentives for small businesses and incentives for savings. So began the Reagan Recovery. A few years later, the Tax Reform Act of 1986 brought the lowest individual and corporate income tax rates of any major industrialized country in the world. The numbers tell the story. Over the eight years of the Reagan Administration: 20 million new jobs were created Inflation dropped from 13.5* in 1980 to 4.1* by 1988 Unemployment fell from 7.6% to 5.5*
Net worth of families earning between $20,000 and $50,000 annually grew by 27% Real gross national product rose 26% The prime interest rate was slashed by more than half, from an unprecedented 21.5* in January 1981 to 10* in August 1988 Given actual rates of inflation, through 1987, the Reagan tax cuts saved the median-income two-earner American family of four close to $9,000 in taxes from what it would have owed in 1980.Tax cuts were only one "leg of the stool." The second, jobs, was equally strong. Not only were there millions of new jobs, but also the benefits of job creation were not limited to one segment of society. Employment of African-Americans rose by more than 25% between 1982 and 1988, and more than half of the new jobs created went to women. Taming the lion called government spending was another key component of the plan - the "third leg of the stool." Here, too, President Reagan did what he said he would do. During his Administration, growth in government spending plummeted from 10% in 1982, to just over 1% in 1987. With inflation factored in, Federal spending actually went down in 1987 - the first time that had happened in well over a decade.
REAGAN FOUNDATION 105R
Net worth of families earning between $20,000 and $50,000 annually grew by 27% Real gross national product rose 26% The prime interest rate was slashed by more than half, from an unprecedented 21.5* in January 1981 to 10* in August 1988 Given actual rates of inflation, through 1987, the Reagan tax cuts saved the median-income two-earner American family of four close to $9,000 in taxes from what it would have owed in 1980.Tax cuts were only one "leg of the stool." The second, jobs, was equally strong. Not only were there millions of new jobs, but also the benefits of job creation were not limited to one segment of society. Employment of African-Americans rose by more than 25% between 1982 and 1988, and more than half of the new jobs created went to women. Taming the lion called government spending was another key component of the plan - the "third leg of the stool." Here, too, President Reagan did what he said he would do. During his Administration, growth in government spending plummeted from 10% in 1982, to just over 1% in 1987. With inflation factored in, Federal spending actually went down in 1987 - the first time that had happened in well over a decade.
REAGAN FOUNDATION 105R