Posted by: Boston Bravery | May 11, 2010

President Reagan Conservatives Dysfunction

The Tax Equity and Fiscal Responsibility Act (TEFRA) raised taxes by $37.5 billion per yearI have never completely understood why conservatives think that President Reagan was such a great example of how the country should be run according to laissez faire capitalism and small government.

President Reagan was a great orator and the one thing I will give him credit for is making Americans in general feel good about being Americans again but that is about it.

I blame him for the mess we are in today.  While making Americans feel better about themselves he had everyone disconnect from and direct their anger toward the federal government.  Though I believe this stand had been around in the Republican party for years before Reagan.

At the same time President Reagan was railing against government (that he was suppose to be running) he was growing it in almost every way possible.  The best way to show how Reagan kept big government is by:

  1. Reagan said in 1983, “We think there is a parallel between federal involvement in education and the decline in profit over recent years.”  During Reagan’s two terms he had two Sectary of Education Terrel Bell and William Bennett.
  2. The selective service saying in 1979 that it “rests on the assumption that your kids belong to the state…. That assumption isn’t a new one. The Nazis thought it was a great idea.” Like eduction Reagan had two director of the Selective Service System General Turnage and Will Ebel.

Now to the good stuff it seems the Tea Party is under the impression the Democrats increase the deficit. the deficit had actually been declining until President Reagan who increased debt percentage back to where it was in 1950’s.  While all previous President had been decreasing it.

Today, Republicans believe that deficits are nothing more than something to ignore when they are in power and to bludgeon Democrats with when they are out of power.

Okay what about taxes?  Don’t Reagan lower taxes?  Nope at best you could say is that he did a tax burden shift.  2003 NRO piece by Bartlett noting, “The year 1988 appears to be the only year of the Reagan presidency, other than the first, in which taxes were not raised legislatively.”  Here is some of the tax increase Reagan signed into law:

  • The Tax Equity and Fiscal Responsibility Act (TEFRA) raised taxes by $37.5 billion per year
  • Highway Revenue Act raised the gasoline tax by another $3.3 billion
  • In 1983, Reagan signed legislation raising the Social Security tax rate
  • The Deficit Reduction Act raised taxes by $18 billion per year
  • The Consolidated Omnibus Budget Reconciliation Act of 1985 raised taxes
  • Tax Reform Act of 1986, which was designed to be revenue-neutral, contained a net tax increase in its first 2 years
  • Omnibus Budget Reconciliation Act of 1987 raised taxes

The net affect of all Reagan’s net effect of all these tax increases was to raise taxes by $164 billion or 2.6 percent of GDP.  Yes this is around half of the tax cut he signed in 1981 and that is why I call it a tax shift.  He reduced the tax rate on wealthiest and shifted to the middle class.  Now that’s wealth redistribution.

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