How much did President Reagan's major tax cuts in the 1980s help the American people? (statistics, myth)
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President Ronald Reagan cut taxes hugely in 1981, and again a few years later.
What was the result?
I made this graph from data in the Statistical Abstract of the United States, published by the U.S. Government, now in public domain. It shows the percentage change in household income, for five quintiles of population income: Bottom 20%, next-to-lowest 20%, middle 20%, next to highest 20%, and highest 20%. It is adjusted for inflation. (if it hadn't been, the increases in income would have been numerically even higher.)
ALL groups saw large increases in their incomes once Regan's tax cuts began to take effect.
I've noticed that the usual liberals have already begun their usual screaming about Reagan's tax cuts "only benefitting the rich". They are apparently casting about for something to use to bash Donald Trump's proposed major tax cuts. The fact that their screams aren't even true, doesn't seem to matter to them.
Documented evidence indicates otherwise. A not unusual status for liberals' claims.
So you are going to ignore the fact that Reagan saw that his tax cuts increased the deficit so he passed a series of tax increases which canceled out most of his tax cuts???
Yet everyone is eating your post up as if it's true.
All one has to do is look at th mess in Kansas to see how tax cuts are working.
I love the “tripled” remark because in 8 years Reagan added less than $2 Trillion to the debt.
Obama in his 8 years added nearly 4x as much.
And the stock market increased in a few months under obama more than during the entirety of Reagan’s presidency, don’t you just love to play with numbers to make it seem like you’re right! Larger numbers make smaller percentage increases seem bigger!
Don't forget the huge growth in GDP in one quarter of 1984 (over 7%).
It has been pointed out by economists that traditional economic recoveries mirror their recessions. The early 80's recession was a deep V recession - it is expected that there would be a steep rebound after a steep drop.
Additionally, one quarter doesn't make up for the fact that GDP performance in the Reagan decade actually lagged the previous and subsequent decades. It's sort of like claiming that because your football team scored a touchdown in the second quarter, the fact that they lost the game is irrelevant.
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Also, Clinton did benefit from the Internet boom.
And Reagan benefited from Paul Volcker finally easing up on interest rates.
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What did Reagan and Bush know that wasn't so?
Reagan and Bush II both believed in the myth that tax cuts spur GDP growth and that tax increases reduce GDP growth. They've been proven wrong on both counts.
Mr. Barlett was part of Reagan's team, a domestic policy advisor to the President, and really believed in the power of tax cuts. He now admits that it was completely wrong.
President Ronald Reagan cut taxes hugely in 1981, and again a few years later.
What was the result?
I made this graph from data in the Statistical Abstract of the United States, published by the U.S. Government, now in public domain. It shows the percentage change in household income, for five quintiles of population income: Bottom 20%, next-to-lowest 20%, middle 20%, next to highest 20%, and highest 20%. It is adjusted for inflation. (if it hadn't been, the increases in income would have been numerically even higher.)
ALL groups saw large increases in their incomes once Regan's tax cuts began to take effect.
I've noticed that the usual liberals have already begun their usual screaming about Reagan's tax cuts "only benefitting the rich". They are apparently casting about for something to use to bash Donald Trump's proposed major tax cuts. The fact that their screams aren't even true, doesn't seem to matter to them.
Documented evidence indicates otherwise. A not unusual status for liberals' claims.
Your source/graph shows that from 1982-1984 all income groups were seeing a steady increase in income.
But after 1984 the lowest 20% of income earners saw their income drop.
After 1986 the next lowest 20%, the middle 20% and next highest 20% saw their income drop and stop increasing.
But from 1982 the highest 20% of income earners saw their income keep on increasing. And your own source shows that the highest 20% of income earners got the most benefits from the Reagan tax cuts (while all other income groups saw their income decrease.)
Just look at your graph. There's one line that towers above the rest, never falls and keeps going up and up like a rocket (and that's the light blue line representing the highest 20% of income earners.)
In 1981, traditional Republicans supported tax cuts, matched by spending cuts, to offset the way inflation was pushing many taxpayers into higher brackets and to spur investment. The Reagan administration’s hastily prepared fiscal blueprint, however, was no match for the primordial forces — the welfare state and the warfare state — that drive the federal spending machine.
Soon, the neocons were pushing the military budget skyward. And the Republicans on Capitol Hill who were supposed to cut spending exempted from the knife most of the domestic budget — entitlements, farm subsidies, education, water projects. But in the end it was a new cadre of ideological tax-cutters who killed the Republicans’ fiscal religion.
Through the 1984 election, the old guard earnestly tried to control the deficit, rolling back about 40 percent of the original Reagan tax cuts. But when, in the following years, the Federal Reserve chairman, Paul Volcker, finally crushed inflation, enabling a solid economic rebound, the new tax-cutters not only claimed victory for their supply-side strategy but hooked Republicans for good on the delusion that the economy will outgrow the deficit if plied with enough tax cuts.
Not only does Trump want a huge tax cut, but he also wants a huge increase in military spending. Have we learned nothing in 30 years.
President Ronald Reagan cut taxes hugely in 1981, and again a few years later.
What was the result?
I made this graph from data in the Statistical Abstract of the United States, published by the U.S. Government, now in public domain. It shows the percentage change in household income, for five quintiles of population income: Bottom 20%, next-to-lowest 20%, middle 20%, next to highest 20%, and highest 20%. It is adjusted for inflation. (if it hadn't been, the increases in income would have been numerically even higher.)
ALL groups saw large increases in their incomes once Regan's tax cuts began to take effect.
I've noticed that the usual liberals have already begun their usual screaming about Reagan's tax cuts "only benefitting the rich". They are apparently casting about for something to use to bash Donald Trump's proposed major tax cuts. The fact that their screams aren't even true, doesn't seem to matter to them.
Documented evidence indicates otherwise. A not unusual status for liberals' claims.
And whats most interesting about your source is from 1982-1984 all income groups were seeing an increase in income together.
Prior to 1984 the lowest 20%, next highest 20% and highest 20% were in one group seeing a steady increase in income together (they were all linked together in one line.)
And prior to 1984 the next lowest 20% and middle 20% were seeing a steady increase in income together (linked together in one line.)
But after 1984 all the income groups divided, and all of the income groups saw their incomes fluctuate and fall (except for the highest 20% which saw their income rise like a rocket.)
Trickle down is anti-tax ideology disguised as an economic policy.
Trickle up is much more feasible but obviously you can only tax people so much and when the money is going to federal government black holes instead of into peoples hands who spend it, that's a problem also.
the real issue is WAGES, not supply and demand. We have a wage issue in America. That's why you have many people who feel like standard of living is declining.
Relative to 40 years ago and inflation adjusted:
Wages-stagnant.
Costs of necessities: food, housing, medical care, education, way up.
Costs of Chinese made consumer items and opioid drugs: way down.
Don't forget the huge growth in GDP in one quarter of 1984 (over 7%).
Also, Clinton did benefit from the Internet boom.
What did Reagan and Bush know that wasn't so?
The economy did expand during the 90s because of the Internet. I would point out however that most people access the Internet with the type of devices that first started to become generally available in the 80s. How much growth in the 80s was due to Microsoft, Apple, Intel, Oracle, IBM etc and the capabilities they enabled?
It has been pointed out by economists that traditional economic recoveries mirror their recessions. The early 80's recession was a deep V recession - it is expected that there would be a steep rebound after a steep drop.
Additionally, one quarter doesn't make up for the fact that GDP performance in the Reagan decade actually lagged the previous and subsequent decades. It's sort of like claiming that because your football team scored a touchdown in the second quarter, the fact that they lost the game is irrelevant.
It did take a while to recover from the poor economy Reagan inherited (20% interest rates, 13% inflation, etc). Yes, the economy would have recovered but it recovered even better thanks to Reagan's policies.
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And Reagan benefited from Paul Volcker finally easing up on interest rates.
That and other factors.
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Reagan and Bush II both believed in the myth that tax cuts spur GDP growth and that tax increases reduce GDP growth. They've been proven wrong on both counts.
Mr. Barlett was part of Reagan's team, a domestic policy advisor to the President, and really believed in the power of tax cuts. He now admits that it was completely wrong.
Tax cuts always improve the economy. Government revenue almost doubled after the tax cuts. Average family income increased. The unemployment rate went down.
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