We've all heard the Republican myth about Ronald Reagan's tax cuts. I call it a myth, because it omits the fact that Reagan signed many tax hikes after his initial cut. Indeed, the many increases that followed his initial cut operated to shift the tax burden from the wealthy to the middle class and working poor.
Reagan's initial tax cuts were top-loaded, to give the bulk of the benefits to the wealthiest. His biggest cut, reducing the top bracket by 29%, affected only the wealthiest Americans. Everyone else got much smaller reductions. When the deficit began to get out of control, however, Reagan signed several hikes.
The subsequent hikes were more evenly distributed across brackets, except for the Payroll Tax increases which hit lower brackets harder and did not touch the top brackets at all. The massive cuts in the top brackets remained in place, and were reduced even further post-Reagan.
Here is the truth, from a conservative publication no less: Reagan raised taxes every year except his first and his last.
"In 1982 alone, [Reagan] 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." [emphasis added]
Other increases:
“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.”
The Conservative National Review: The Real Reagan Record!
Reagan's initial tax cuts were top-loaded, to give the bulk of the benefits to the wealthiest. His biggest cut, reducing the top bracket by 29%, affected only the wealthiest Americans. Everyone else got much smaller reductions. When the deficit began to get out of control, however, Reagan signed several hikes.
The subsequent hikes were more evenly distributed across brackets, except for the Payroll Tax increases which hit lower brackets harder and did not touch the top brackets at all. The massive cuts in the top brackets remained in place, and were reduced even further post-Reagan.
Here is the truth, from a conservative publication no less: Reagan raised taxes every year except his first and his last.
"In 1982 alone, [Reagan] 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." [emphasis added]
Other increases:
- 1983: Reagan raised the Social Security tax rate, a tax increase that lives with us still, so that those with moderately high earnings see their payroll taxes rise every single year.
- 1984: Reagan signed another big tax increase in the Deficit Reduction Act.
- 1985: Consolidated Omnibus Budget Reconciliation Act of 1985 raised taxes yet again.
- 1986: Tax Reform Act of 1986, which was designed to be revenue-neutral, contained a net tax increase in its first 2 years.
- 1987: Omnibus Budget Reconciliation Act of 1987 raised taxes still more!
- 1988: Alzheimer's sets in; Reagan forgets to raise taxes!
“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.”
The Conservative National Review: The Real Reagan Record!
