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NOT THE PARTY OF LINCOLN, EISENHOWER, OR EVEN REAGAN
By S.C. Burns
Historian, Author
Reagan was a great Communicator, at home and
internationally. There’s no denying that
fact. He expressed compassion, love and
became the father of our country. He had
good intentions as he prepared for, and took the highest office in the
land. He offered tremendous comfort to
the nation after the disastrous Challenger explosion in January of 1986—acting
as a great national father, comforting the families of those who lost loved
ones that day. He and Nancy became
personal and political friends to Mr. and Mrs. Gorbachev (Mikhail Gorbachev was
the Prime Minister of the U.S.S.R.). No one can
deny that Reagan was a key mover in bringing down the Berlin Wall. However, a trained economist he was not. As his Vice President, George Herbert Walker
Bush, would later say, his economic acuity was more like “voodoo economics,”
than Keynesian wisdom. Nevertheless, in
retrospect, Reagan looks like a capitalist genius, compared to today’s
leadership. “Well, here we go again,” as
the Gipper would say. If Reagan were
here today, I guarantee he would be astounded at recent tax policies, which
favor the top tier only.
Ronald
Reagan was known as the Great Communicator, not just with Republicans but with
a large group of Congressional leaders, known as Reagan Democrats. Why?
Because he was working for the American people, and he was aware that
real progress could not occur without compromise and cooperation. When it came to both increasing, and
decreasing taxes, Reagan was flexible and reasonable, making mistakes, then attempting to repair those mistakes. There is a reason why people like Christine
Todd Whitman (former governor of New Jersey and now a leader in environmental
protection policies) are former Republicans.
Whitman calls herself an Eisenhower Republican, and she remained a
rational and moderate Republican beyond the Reagan years. Today, she—like me—is an admitted
Independent. This is no longer the party
of Lincoln, Eisenhower, or even the more conservative Reagan.
THE FOLLOWING IS THE REAL STORY ABOUT
THE REAGAN TAX CUTS—AND HIKES. THIS COMES FROM THE PULITZER PRIZE WINING
NEWSGROUP, POLITIFACT:
First, Reagan alone didn't cut taxes. He did it in conjunction with Congress. Having said that, let's look at the Reagan era of taxation.
There's no debate that Reagan dramatically reduced taxes in 1981, his first year in office. That $38-billion cut would equal $90 billion in today's dollars. At the time, it represented 1.91 percent of the gross domestic product, which is the total value of goods and services produced in the United States during a given year.
But the following year, Reagan raised taxes dramatically and other increases followed.
The 1982 hike alone, which applied to corporations and individuals, increased taxes by about $17 billion, according to a 2006 U.S. Treasury report. The increase represented 0.8 percent of the GDP. That's why it is sometimes billed as the largest peacetime tax increase in American history. That same year he also raised the gasoline tax.
In 1983, Reagan hiked taxes again. This time it was the passage of the Social Security Reform Act of 1983, which increased payroll taxes to provide long-term funding for Medicare and Social Security. According to liberal economist Paul Krugman, in a June 8, 2004 commentary in The New York Times, "this tax increase more than undid any gains from Mr. Reagan's income tax cuts" for many middle- and low-income families.
Reagan also significantly increased taxes through the Deficit Reduction Act of 1984, the Tax Reform of 1986 and the Omnibus Budget Reconciliation Act of 1987.
We asked Loughlin why he mentioned only Reagan's tax cut and not the subsequent increases. He said Reagan's 1984 increase, for example, "was to combat a budget deficit and it was also because of a fear of inflation in 1984."
"When I make the statement it was not to provide an economics lesson, but it was to illustrate that when tax rates are cut, specifically marginal tax rates and business tax rates, historically the economy experiences growth," he said. "If you argue that that's what we need to do right now, grow the economy, then certainly that's a lesson from the past that has some relevance today."
Next week, how do the truly wealthy people of our
nation feel about the new tax bill? (Hint: Trump cannot fall into this category. He won’t share his tax returns!). You may be surprised to find that there are
still wealthy patriots in today’s U.S.A., with great ideas!
