Tuesday, November 04, 2003

Reagan - Tax Raising Machine!

The Daily Howler points to an interesting article by conservative columnist Bruce Bartlett, a senior fellow at the National Center for Policy Analysis, in which he notes the number of times that President Reagan raised taxes during his administration:

“Reagan may have resisted calls for tax increases, but he ultimately supported them. In 1982 alone, he signed into law not one but two major tax increases. The Tax Equity and Fiscal Responsibility Act raised taxes by $37.5 billion per year, and the Highway Revenue Act of 1982 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.

In 1983, Reagan signed legislation raising the Social Security tax rate. This is a tax increase that lives with us still, since it initiated automatic increases in the taxable wage base. As a consequence, those with moderately high earnings see their payroll taxes rise every single year.

The following year, Reagan signed another big tax increase in the Deficit Reduction Act of 1984. This raised taxes by $18 billion per year or 0.4 percent of GDP. A similar sized tax increase today would be about $44 billion.

The Consolidated Omnibus Budget Reconciliation Act of 1985 raised taxes yet again. Even the Tax Reform Act of 1986, which was designed to be revenue-neutral, contained a net tax increase in its first two years. And the Omnibus Budget Reconciliation Act of 1987 raised taxes still more.

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.”

I know. It was those darn liberal Democrats who ran the Congress back then who forced all these tax increases through. Yeah, sure. As if the Reagan administration was asleep at the wheel this whole time. Reagan could have used his veto pen at any time or The Great Communicator could have climbed up onto his bully pulpit to stop any of these tax packages. But he did not. He was a politician. Not a demi-God, not a superhero. His administration had its hands in every one of those tax packages - getting favors here, compromising there - and thus he is just as responsible for the outcome as the Congress.

Republicans today have adopted this fantasy image of Reagan as the ultimate anti-tax crusader. Well, he was. But obviously on a more realistic level than what Bush Jr. seems to think.

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