The Reagan Tax Cuts did NOT Produce an Economic Boom (nor will Trump’s)
October 23, 2017
“This year is the 46th anniversary of President Reagan’s tax reform bill”, cited Mitch McConnell during
The fictionalized Reagan years that exists only in the minds of Republicans goes like this: America… disparing the malaise of the Carter Administration (fact: Carter never used the word “malaise” in his infamous “Malaise Speech“)… elected the “sunny optimistic” Ronald Reagan, who… by the sheer magnitude of his personality… struck fear into the hearts of Iran, convincing them to release the hostages the moment he was inaugurated. He slashed taxes on the wealthy on a premise dubbed
None of it is true of course.
Iran didn’t simply release the hostages because they were terrified of the Gipper. Carter had actually arranged their release his final months in office, which Iran agreed to (in a final insult) the very HOUR Carter left office (Carter actually flew to Germany to welcome the released hostages immediately following the inauguration.)
The Soviet Union didn’t “see the error of its ways” and relent. It went bankrupt trying to keep pace with the U.S. in a costly arms race that proved to be too much for a country with almost no industry and an economy half the size of France’s. First, they had to cut loose some of their satellite nations to save money, which opened up a ridiculously long train route from East Germany, through Eastern Europe, and back around to West Germany, rendering
The economy wasn’t miserable under Carter as Republican efforts have convinced you to believe. 10.3 Million jobs were created in the four years of the Carter Administration (compared to 15.8 Million jobs created in eight years under Reagan.) Unemployment in 1979 (link note: you’ll need to set the start/end dates manually) actually bounced just under 6.0% throughout the year. In 1980, economic turmoil did result from a grain embargo against Russia (for their support of Iran) that hurt farmers, and a retaliatory oil embargo by Russia against the U.S. caused gas prices (and eventually all else) to spike (just as it did in 2008 under Bush.) And while unemployment peaked at 7.8% in July of 1980, it was back down to 7.4% by the time Carter left office and continued to coast down to 7.2% by April, 1981.
Then “Reaganomics” took over. Reagan’s proposed “Economic Recovery Tax Act of 1981″ [ibid top], promised to slash the top tax rate from
Reagan’s massive tax cut for the wealthy was NOT balanced out by any resulting “economic boom” in increased spending, creating jobs, resulting in more people paying taxes into the system the way Republicans predicted. Instead, corporations had less incentive to invest in their businesses and more incentive to just park their money in investments. The Deficit exploded due to the massive loss in tax revenue coupled with Reagan pouring money into National Defense. The problem was made exponentially worse thanks to a rash of tiny
By the time Reagan left office, the economy had drastically improved. But he had to raise taxes ELEVEN TIMES to slow (but not stop) the hemorrhaging of cash into the National Debt… which had TRIPLED during his eight years in office. 204 years of Debt from
When Dick Cheney… Reagan’s former Secretary of Defense… ran for Vice President in 2000, he belittled praise for shrinking the National Debt due to the Budget Surplus under Bill Clinton by declaring “Reagan proved Deficits don’t matter.” “We don’t need to tax people so much that we start paying off the Debt!” We can (Cheney argued) tax people less and allow the Debt to grow again because “Reagan proved deficits don’t matter.”
That is, until a Democrat takes office. Then the size of the Debt/Deficit is a travesty! A national disgrace that endangers our very way of life.
And this is why Republicans will NEVER eliminate the Deficit and start paying off the National Debt. Because the moment tax revenue starts exceeding government spending they will argue (just as Bush did in 2000) that is was proof Americans were being “over taxed” and deserved
And now we see Trump going straight down the same imaginary rabbit hole (falsely conflating his plan to give huge tax cuts to the rich with public support for tax “REFORM“), requesting a massive tax cut for the rich and declaring the “resulting economic growth… just like we saw under Reagan… will offset the loss in tax revenue due to massive tax cuts for the rich.” And WHY do the Rich need these huge tax cuts? Because (according to Republicans) we are “the most taxed nation on Earth” with
Hiring employees and buying property/equipment for your business are considered “business expenses” and are ALREADY tax deductible. So anyone who tries to tell you corporations need “tax cuts to grow their business” is either knowingly lying to you or is just too damn stupid to know better. Trump is (supposedly) a Billionaire businessman, but he’s also
And while were on the topic of Reagan’s legacy, what do you think “The Gipper” would say about the current occupant of the White House cozening up to Russia and even denying evidence of Russian interference in our democracy?
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October 23, 2017
· Admin Mugsy · No Comments - Add
Posted in: Economy, Greed, Jobs, Money, myth busting, rewriting history, Taxes
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