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Taxes: What people forget about Reagan

randel

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Taxes: What people forget about Reagan - Sep. 8, 2010


NEW YORK (CNNMoney.com) -- Those who oppose higher taxes and are fed up with record levels of U.S. debt may pine for Ronald Reagan, the patron saint of lower taxes and smaller government.

But it's worth considering just what Reagan did -- and didn't do .....


snip
Soon after taking office in 1981, Reagan signed into law one of the largest tax cuts in the postwar period.

That legislation -- phased in over three years -- pushed through a 23% across-the-board cut of individual income tax rates

snip


Despite the aggressive tax cutting, Reagan couldn't ignore the budget deficit, which was burgeoning.

After Reagan's first year in office, the annual deficit was 2.6% of gross domestic product. But it hit a high of 6% in 1983, stayed in the 5% range for the next three years, and fell to 3.1% by 1988. (By comparison, this year it's projected to be 9% but is expected to drop considerably thereafter.)

So, despite his public opposition to higher taxes, Reagan ended up signing off on several measures intended to raise more revenue.


snip

There were other notable tax increases under Reagan.

In 1983, for example, he signed off on Social Security reform legislation that, among other things, accelerated an increase in the payroll tax rate, required that higher-income beneficiaries pay income tax on part of their benefits, and required the self-employed to pay the full payroll tax rate, rather than just the portion normally paid by employees.

The tax reform of 1986, meanwhile, wasn't designed to increase federal tax revenue. But that didn't mean that no one's taxes went up. Because the reform bill eliminated or reduced many tax breaks and shelters, high-income tax filers who previously paid little ended up with bigger tax bills


snip

How might Reagan fare today?
Reagan's behavior might not pass muster with those voters today who insist their Congressmen treat every proposed tax increase as poisonous to the republic.

"By today's standards, the Gipper would easily qualify for status as a back-stabbing, treacherous RINO [Republican in Name Only]," wrote Tax Analysts contributing editor Martin Sullivan, in an article for Tax Notes in May.


snip
 

randel

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interesting article, especially with several here waiting for a reagan clone to come along.
 

imagep

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interesting article, especially with several here waiting for a reagan clone to come along.
It has always befuddled me how so many people can worship such a bad president. For some odd reason their memories of the Reagan economy was that it was the "good ole days", in reality the economy was horrible under Reagan. I've had people to absolutly insist that two years after Reagan took office that the unemployment rate was 2% that the inflation rate was 2%, that we had budget surpluses because he cut taxes and spending (none of that is anywhere near the truth).

Anyone but be notice how on the news they keep saying that "Bla Bla Bla (auto sales, home sales, unemployment, consumer confidence, retail sales, etc) is at the worst level in 28 year"? Ever do the math? Who was president then?
 

dontworrybehappy

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interesting article, especially with several here waiting for a reagan clone to come along.
Well I'm certainly glad you approve of your own article.

Or was this just a back door way of bumping your own thread hoping to get a reply?

The world will never know...........;)

All I know about Reagan is what I read, I was in like second grade at the end of his presidency so I can't really comment.
 

randel

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Well I'm certainly glad you approve of your own article.

Or was this just a back door way of bumping your own thread hoping to get a reply?

The world will never know...........;)

All I know about Reagan is what I read, I was in like second grade at the end of his presidency so I can't really comment.
:mrgreen: nah, didnt bump it, i've caught grief before for not posting my thoughts right away, and waiting for others first.
 

mpg

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straw man unless you can point to someone who said that Reagan never raised taxes

Much like Obama, he inherited a horrible economy, except it was even worse that what Obama inherited. To blame it on Reagan would be no better than blaming the current economy on Obama.

He lowered taxes to jump start the economy and it worked like a charm. The economy was awesome after that. The low tax rates were no longer necessary, so he raised them for the sake of fiscal responsibility.
 

imagep

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straw man unless you can point to someone who said that Reagan never raised taxes

Much like Obama, he inherited a horrible economy, except it was even worse that what Obama inherited. To blame it on Reagan would be no better than blaming the current economy on Obama.

He lowered taxes to jump start the economy and it worked like a charm. The economy was awesome after that. The low tax rates were no longer necessary, so he raised them for the sake of fiscal responsibility.
But the economy was ALREADY growing before he raised taxes. The ramp up of military spending likely did much more to keep our economy growing than the tax cut did. Cutting taxes while increasing spending is really not a good idea. Do one or the other, but certainly not both. Reagan was one of our worst peace time offenders of budget deficits.
 

Gipper

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imagep said:
Anyone but be notice how on the news they keep saying that "Bla Bla Bla (auto sales, home sales, unemployment, consumer confidence, retail sales, etc) is at the worst level in 28 year"? Ever do the math? Who was president then?
Yeah, one problem - that coincides with the great crash of '87, which Reagan had no part of. That was the private sector losing confidence through bubble scares.

Reagan did indeed raise taxes on many, but those were just offset by the massive corporate slashes he supported through supply-side economics (which he is NOT the inventor of - Kennedy supported this 25 years earlier). He created a lot of "smart debt", which was valuable for fighting a multi-headed hydra of international problems in the Middle East with Iran-Contra, as well as a Marxist cuo and Sandanistan uproar in the Latin American area. In addition, he had to offset losses in foreign-based income when he passed crippling tariffs on Japan which was pretty much poised to take over the automobile and electronics global industry.

So you had Reagan fighting the NYSE throwing up all over itself and Bush reeling from 9/11. What's Obama's excuse again? Haiti?
 

imagep

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Yeah, one problem - that coincides with the great crash of '87, which Reagan had no part of. That was the private sector losing confidence through bubble scares.

Reagan did indeed raise taxes on many, but those were just offset by the massive corporate slashes he supported through supply-side economics (which he is NOT the inventor of - Kennedy supported this 25 years earlier). He created a lot of "smart debt", which was valuable for fighting a multi-headed hydra of international problems in the Middle East with Iran-Contra, as well as a Marxist cuo and Sandanistan uproar in the Latin American area. In addition, he had to offset losses in foreign-based income when he passed crippling tariffs on Japan which was pretty much poised to take over the automobile and electronics global industry.

So you had Reagan fighting the NYSE throwing up all over itself and Bush reeling from 9/11. What's Obama's excuse again? Haiti?
2010-28 = 1982
 

Lord Tammerlain

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2010-28 = 1982
The recession of 1982 was somewhat artificial in creation

The Fed Chairman determined to finally get inflation under control jacked up the fed funds rate to very high levels, causing a massive recession, where the economy befoe hand was still in "stagflation" from the 70s.
 

imagep

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The recession of 1982 was somewhat artificial in creation

The Fed Chairman determined to finally get inflation under control jacked up the fed funds rate to very high levels, causing a massive recession, where the economy befoe hand was still in "stagflation" from the 70s.
So it wasn't caused by high taxes? Hmm, very interesting. I'm having a very hard time finding any recessions that were caused by high taxes and an equally hard time finding any recessions that were cured by cutting taxes to below the rates that we currently pay.
 

MKULTRABOY

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You implying a correlation between high taxes and recession?
 

imagep

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You implying a correlation between high taxes and recession?
I'm actually not. I am implying that there is no creditable historical evidence that high tax rates on the rich effect our economy at all (one way or the other). Right wingers tend to distort the data to make it seem like cutting high top tax rates improves the economy, when actually if one had to find a correlation, that correlation would indicate just the opposit. Left wingers tend to be morons and they have yet to pick up on this fact, which is totally befuddling seeing how it would support their quest for higher taxes.

I do suspect that tax rates on the middle class greatly effect our economy, but I am again not sure that it can be proved historically. At any given time there are so many independant factors effecting our economy, many of them tending to cancel out each other while others are compounding on top of each other, it may be impossible to identify any one factor as being significantly relevent.
 
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MaggieD

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Taxes: What people forget about Reagan - Sep. 8, 2010


NEW YORK (CNNMoney.com) -- Those who oppose higher taxes and are fed up with record levels of U.S. debt may pine for Ronald Reagan, the patron saint of lower taxes and smaller government.

But it's worth considering just what Reagan did -- and didn't do .....


snip
Soon after taking office in 1981, Reagan signed into law one of the largest tax cuts in the postwar period.

That legislation -- phased in over three years -- pushed through a 23% across-the-board cut of individual income tax rates

snip


Despite the aggressive tax cutting, Reagan couldn't ignore the budget deficit, which was burgeoning.

After Reagan's first year in office, the annual deficit was 2.6% of gross domestic product. But it hit a high of 6% in 1983, stayed in the 5% range for the next three years, and fell to 3.1% by 1988. (By comparison, this year it's projected to be 9% but is expected to drop considerably thereafter.)

So, despite his public opposition to higher taxes, Reagan ended up signing off on several measures intended to raise more revenue.


snip

There were other notable tax increases under Reagan.

In 1983, for example, he signed off on Social Security reform legislation that, among other things, accelerated an increase in the payroll tax rate, required that higher-income beneficiaries pay income tax on part of their benefits, and required the self-employed to pay the full payroll tax rate, rather than just the portion normally paid by employees.

The tax reform of 1986, meanwhile, wasn't designed to increase federal tax revenue. But that didn't mean that no one's taxes went up. Because the reform bill eliminated or reduced many tax breaks and shelters, high-income tax filers who previously paid little ended up with bigger tax bills


snip

How might Reagan fare today?
Reagan's behavior might not pass muster with those voters today who insist their Congressmen treat every proposed tax increase as poisonous to the republic.

"By today's standards, the Gipper would easily qualify for status as a back-stabbing, treacherous RINO [Republican in Name Only]," wrote Tax Analysts contributing editor Martin Sullivan, in an article for Tax Notes in May.


snip
Interesting post. Those were fair increases, too. Requiring self-employed to pay both ends of Social Security's tax really can't be argued. There's no logical reason they weren't paying both ends in the first place. Closing loopholes is always a wonderful thing. I think the reason people wouldn't consider him a RINO is just because these tax increases were seen as fair across the board. I think he'd pass muster just fine.

The politician who has the cahonays to tax health insurance benefits and other perks will be my hero. No earthly reason why this income isn't taxed. And, really? Who could argue that they shouldn't be taxed? No one in good conscience. Sorry, off point, but couldn't help it. ;-)
 
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SheWolf

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straw man unless you can point to someone who said that Reagan never raised taxes

Much like Obama, he inherited a horrible economy, except it was even worse that what Obama inherited. To blame it on Reagan would be no better than blaming the current economy on Obama.

He lowered taxes to jump start the economy and it worked like a charm. The economy was awesome after that. The low tax rates were no longer necessary, so he raised them for the sake of fiscal responsibility.
Imagep
"But the economy was ALREADY growing before he raised taxes. The ramp up of military spending likely did much more to keep our economy growing than the tax cut did. Cutting taxes while increasing spending is really not a good idea. Do one or the other, but certainly not both. Reagan was one of our worst peace time offenders of budget deficits."

I think the real strawman is the tax cut debate. Spending got us out of the Great Depression, and nobody can debate the massive military and science spending during the Reagan admin. And with that spending Reagan should have raised taxes. The real debate should be about spending and cutting deficits, not simply tax cuts, tax cuts. Republicans can't keep cutting taxes more and more. Eventually the tax cutting will have to stop, and everybody will have to admit taxes are low enough or too low. But expecting politicians to be honest with the American people is a complete joke...

In general, I don't really trust politicians trying to manage a complicated tax laws above their rhetoric and self interests. Politicians often sneak in tax increases all the time without public complaint or knowledge..

I am for spending on education, science and research, a defensive military, supporting social security, and infrastructure.
 

Dittohead not!

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Taxes: What people forget about Reagan - Sep. 8, 2010


NEW YORK (CNNMoney.com) -- Those who oppose higher taxes and are fed up with record levels of U.S. debt may pine for Ronald Reagan, the patron saint of lower taxes and smaller government.

But it's worth considering just what Reagan did -- and didn't do .....


snip
Soon after taking office in 1981, Reagan signed into law one of the largest tax cuts in the postwar period.

That legislation -- phased in over three years -- pushed through a 23% across-the-board cut of individual income tax rates

snip


Despite the aggressive tax cutting, Reagan couldn't ignore the budget deficit, which was burgeoning.

After Reagan's first year in office, the annual deficit was 2.6% of gross domestic product. But it hit a high of 6% in 1983, stayed in the 5% range for the next three years, and fell to 3.1% by 1988. (By comparison, this year it's projected to be 9% but is expected to drop considerably thereafter.)

So, despite his public opposition to higher taxes, Reagan ended up signing off on several measures intended to raise more revenue.


snip

There were other notable tax increases under Reagan.

In 1983, for example, he signed off on Social Security reform legislation that, among other things, accelerated an increase in the payroll tax rate, required that higher-income beneficiaries pay income tax on part of their benefits, and required the self-employed to pay the full payroll tax rate, rather than just the portion normally paid by employees.

The tax reform of 1986, meanwhile, wasn't designed to increase federal tax revenue. But that didn't mean that no one's taxes went up. Because the reform bill eliminated or reduced many tax breaks and shelters, high-income tax filers who previously paid little ended up with bigger tax bills


snip

How might Reagan fare today?
Reagan's behavior might not pass muster with those voters today who insist their Congressmen treat every proposed tax increase as poisonous to the republic.

"By today's standards, the Gipper would easily qualify for status as a back-stabbing, treacherous RINO [Republican in Name Only]," wrote Tax Analysts contributing editor Martin Sullivan, in an article for Tax Notes in May.


snip
None of the above should have been a surprise, given the fact that he signed into law the biggest tax increase in California history when he was governor of this state. The real surprise is that he has become known as the great crusader against big government and high taxes.

The Reagan Administration was a real mixed bag, as was the administration of most presidents. The Reagan we revere today is just a memory of a president who never really existed.
 

TurtleDude

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I am sure glad Reagan picked the supreme court justices he did rather than Jimmy Carter or Mondale getting to pick them
 
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