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09-10-2010, 09:14 PM
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#1
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Valued Poster
Join Date: Dec 31, 2009
Location: In hopes of having a good time
Posts: 6,942
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Reagan-Lovers: Stop the Bull
The full story is here: http://finance.yahoo.com/taxes/artic...d=taxes-filing
Taxes: What People Forget About Reagan
by Jeanne Sahadi
Friday, September 10, 2010
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 -- as lawmakers grapple with many of the same issues that their 1980s counterparts faced: a deep recession, high deficits and a rip-roaring political divide over taxes.
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. It also called for tax brackets, the standard deduction and personal exemptions to be adjusted for inflation starting in 1984. That would reduce "bracket creep" since the high inflation of the 1970s and early 1980s meant incomes rose very fast, pushing taxpayers into ever higher brackets even though the real value of their income hadn't changed.
The 1981 bill also made certain business deductions more generous.
In 1986, Reagan lowered individual income tax rates again, this time in landmark tax reform legislation.
As a result of the 1981 and 1986 bills, the top income tax rate was slashed from 70% to 28%.
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.
"Reagan was certainly a tax cutter legislatively, emotionally and ideologically. But for a variety of political reasons, it was hard for him to ignore the cost of his tax cuts," said tax historian Joseph Thorndike.
Two bills passed in 1982 and 1984 together "constituted the biggest tax increase ever enacted during peacetime," Thorndike said.
[See How the Expiring Bush Tax Cuts Affect You]
The bills didn't raise more revenue by hiking individual income tax rates though. Instead they did it largely through making it tougher to evade taxes, and through "base broadening" -- that is, reducing various federal tax breaks and closing tax loopholes.
For instance, more asset sales became taxable and tax-advantaged contributions and benefits under pension plans were further limited.
"What people forget about Ronald Reagan was that he very much converted to base broadening as a means of reducing deficits and as a means of tax reform," said Eugene Steuerle, an Institute Fellow at the Urban Institute who had helped lay the groundwork for tax reform in 1986 and served as a deputy assistant Treasury secretary during Reagan's second term.
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.
"Some of these taxpayers were substantial contributors to the Republican Party and to the president's re-election campaign, and had direct access to the White House. Reagan rebuffed their pleas," wrote J. Roger Mentz, the Treasury assistant secretary for tax policy in 1986, in a Tax Notes commentary last year.
[See 71 Ways to Save on Taxes Now]
All told, the tax increases Reagan approved ended up canceling out much of the reduction in tax revenue that resulted from his 1981 legislation.
Annual federal tax receipts during his presidency averaged 18.2% of GDP, a smidge below the average under President Carter -- and a smidge above the 40-year average today.
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.
Thanks in part to the increases in defense spending during his administration, Reagan also didn't really reduce the size of government. Annual spending averaged 22.4% of GDP on his watch, which is above today's 40-year average of 20.7%, and above the 20.8% average under Carter.
Indeed, in one very symbolic respect he enlarged it. While in the early years of his presidency Reagan tried to shrink the IRS, by the end, the number of IRS employees hit an all-time high, according to Steuerle in his book Contemporary U.S. Tax Policy.
The reason was two-fold, Steuerle said. The first was a desire to crack down on the proliferation of tax shelters. But the point of cracking down was to boost tax revenue. That, in turn, could reduce the need to impose other tax increases to combat budget deficits.
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09-10-2010, 10:05 PM
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#2
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Valued Poster
Join Date: Dec 26, 2009
Location: calif
Posts: 3,187
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Without taking the time to go back and do the research, I'll comment just from memory.
Reagan put thru quite a few conservative programs but like Bush I he had to deal with one house of Congress or another in Democrat hands. This forced compromise that was more in the Democrat mode. Thus, so many years later, lazy or duplicitous writers such as Ms. Sahadi can now blame him for deficits that were at the very least caused by those compromises.
RIP Ronaldo Maximus
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09-11-2010, 05:40 AM
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#3
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Valued Poster
Join Date: Dec 19, 2009
Location: Buffalo NY
Posts: 7,271
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And let's not forget......the guy who signed the bill that raises taxes at the end of this year was George Bush.
But with typical Republicanism, rather than blame the guy who made the mistake, we'll blame the guy who didn't fix the mistake.
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09-11-2010, 08:35 AM
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#4
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Valued Poster
Join Date: Nov 20, 2009
Location: Dallas
Posts: 965
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Urban Institute == liberal think tank... I wouldn't put too much stock in anything they say, since one of the participants, Joyce Foundation, owes it's existance to George Soros.
Membership and Funding
The institute draws its members from the fields of government and community service, academia, journalism, and business. A small group of senior fellows directs institute-sponsored research with the assistance of a research staff of 400. In addition to directing specific projects, senior fellows also conduct independent research, publish in scholarly and mass-market publications, and represent the institute in the media and while testifying before Congress.
See partial list of supporters...
Project Participants
Anne Borland
Vice President, Director of Public Services
The Foundation Center
New York, New York
Kendall Christiansen
Special Projects Officer
The New York Community Trust
New York, New York
Margaret C. Ayers
Executive Director
Robert Sterling Clark Foundation
New York, New York
Bill L. Barnes
Vice President, Development/Special Projects
Christian Church (Disciples of Christ) Indianapolis, IN
Henry R. Brett
Acting Director, Development and Public Affairs
The Asia Foundation San Francisco, CA
Rob Collier
Grants Director
Gannett Foundation, Inc.
Rochester, New York
Carol L. Barbeito, PH.D.
President
C. L. Barbeito, PH.D. and Associates
Littleton, CO
Elizabeth T. Boris
Vice President for Research
Council on Foundations
Washington, D.C.
Charles A. Johnson
Vice President, Development
Lilly Endowment, Inc.
Indianapolis, IN
Sheila A. Leahy
Senior Program Officer
The Joyce Foundation
Chicago, IL
Ruth Mayless
Program Officer
The Ford Foundation
New York, New York
John Kreidler
Senior Program Officer
The San Francisco Foundation
San Francisco, CA
Richard A. Mittenthal
Partner-in-charge: Foundations & Cultural Institutions
The Conservation Company
New York, New York
Alice A. Pinsley, Ph.D., CFP
Planned Giving Consultant
Stamford, CT
Howard Negrin
Director of the Office of Grants & Contracts
Baruch College/The City University of New York
New York, NY
Nancy Pettis
Coordinator of Nonprofit Studies
The Center for Public Policy of the Union Institute
Washington, DC
Benjamin R. Shute, Jr.
Secretary
Rockefeller Brothers Fund
New York, NY
Project Participants
Ian T. Sturrock
Vice President - Development & University Relations
Bradley University
Peoria, IL
Henry C. Suhrke
Editor
The Philanthropy Monthly
New Milford, CT
Russy D. Sumariwalla
Vice President and Senior Fellow
United Way Strategic Institute
Alexandria, VA
John D. Taylor
President
First Bank System Foundation
Minneapolis, MN
Luz A. Vega
Director of Grants Programs
The James Irvine Foundation
San Francisco, CA
Jerrold A. Weitzman
Program Officer
Exxon Corporation
New York, NY
Stephen Wertheimer
Vice President for Development
Baruch College/The City University
New York, NY
Sourced from their own web site.
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09-11-2010, 08:42 AM
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#5
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Pending Age Verification
User ID: 499
Join Date: Apr 3, 2009
Location: Atlanta
Posts: 2,276
My ECCIE Reviews
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Quote:
Originally Posted by Doove
But with typical Republicanism, rather than blame the guy who made the mistake, we'll blame the guy who didn't fix the mistake.
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Too bad either party wastes time and energy with blame. I don't think 'blame' ever fixed a problem.
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09-11-2010, 09:40 AM
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#6
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Valued Poster
Join Date: Dec 12, 2009
Location: near Lake Ontario
Posts: 48,654
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Quote:
Originally Posted by Doove
And let's not forget......the guy who signed the bill that raises taxes at the end of this year was George Bush.
But with typical Republicanism, rather than blame the guy who made the mistake, we'll blame the guy who didn't fix the mistake.
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And the guy that made the mistake was asked to do it by the guy that did not fix it.
Quote:
Originally Posted by Ansley
Too bad either party wastes time and energy with blame. I don't think 'blame' ever fixed a problem.
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Ansley Has it right.
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09-11-2010, 11:40 AM
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#7
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Valued Poster
Join Date: Dec 19, 2009
Location: Buffalo NY
Posts: 7,271
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Quote:
Originally Posted by offshoredrilling
And the guy that made the mistake was asked to do it by the guy that did not fix it.
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Not sure i follow, OSD. Obama wasn't a Senator when the Bush tax cuts were enacted. Besides that, they're called "The Bush Tax Cuts" for a reason.
Assigning blame is what elections are all about. So while assigning blame doesn't "solve" anything, it can help make sure the same mistake isn't repeated.
Nevertheless, there is no blame here to be assigned. Bush signed the law, and Obama is letting the law expire as it was designed to do when it was signed; whilst essentially attempting to "pass" a tax cut of his own geared more towards the middle class.
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09-11-2010, 12:52 PM
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#8
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Valued Poster
Join Date: Dec 26, 2009
Location: calif
Posts: 3,187
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Quote:
By Doove Bush signed the law, and Obama is letting the law expire as it was designed to do when it was signed
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It wasn't designed specifically to expire. Like many of these bills with an expiration date, it's designed to be revisited at the time of expiration. Therefore, if Obama allows it, thru the Democratic Congress, to be renewed, it's his tax cut and his addition to the debt.
And that is another little game that politicians play.
Ansley, you were so right. Blame doesn't fix the problem.
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09-11-2010, 01:16 PM
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#9
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Account Disabled
Join Date: Dec 23, 2009
Location: Central Texas
Posts: 15,047
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Quote:
Originally Posted by John Bull
Ansley, you were so right. Blame doesn't fix the problem.
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Yes, you are both correct. I vividly recall every bad thing that occurred between the 9/11 atttacks during GW's first year in office to the September '08 stock market crash, was blamed on Bill Clinton. If it was bad, it was Clinton's fault!
It is apparent from the wide assortment of problems confronting America today, that blaming Clinton did not "fix the problem." It is equally apparent from the tremendous amount of problems left behind by the Bush Administration that the blame game did its part in creating many, many problems for Obama to deal with!
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09-11-2010, 01:27 PM
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#10
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Valued Poster
Join Date: Dec 23, 2009
Location: gone
Posts: 3,401
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Quote:
Originally Posted by John Bull
It wasn't designed specifically to expire. Like many of these bills with an expiration date, it's designed to be revisited at the time of expiration. Therefore, if Obama allows it, thru the Democratic Congress, to be renewed, it's his tax cut and his addition to the debt.
And that is another little game that politicians play.
Ansley, you were so right. Blame doesn't fix the problem.
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The reason the bill has a sunset clause is because the "scoring rules", based on static economic analysis, required such to achieve an acceptable cost. These are the same sort of bullshit scoring rules that project that Obamacare won't cost anything. If anyone believes either proposition, I have this bridge for sale...
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09-11-2010, 01:39 PM
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#11
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Valued Poster
Join Date: Dec 19, 2009
Location: Buffalo NY
Posts: 7,271
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Quote:
Originally Posted by John Bull
Therefore, if Obama allows it, thru the Democratic Congress, to be renewed, it's his tax cut and his addition to the debt.
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So you agree that the Bush tax cuts were his addition to the debt.
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09-11-2010, 01:51 PM
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#12
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Valued Poster
Join Date: Dec 12, 2009
Location: near Lake Ontario
Posts: 48,654
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Quote:
Originally Posted by Doove
Not sure i follow, OSD. Obama wasn't a Senator when the Bush tax cuts were enacted. Besides that, they're called "The Bush Tax Cuts" for a reason.
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Ahhh, It depends on what you see as the mistake. Bush made many, but cut in tax was not one of them as I see it.
Quote:
Originally Posted by Doove
Assigning blame is what elections are all about. So while assigning blame doesn't "solve" anything, it can help make sure the same mistake isn't repeated.
Nevertheless, there is no blame here to be assigned. Bush signed the law, and Obama is letting the law expire as it was designed to do when it was signed; whilst essentially attempting to "pass" a tax cut of his own geared more towards the middle class.
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I try to vote for answers to the problems, as I see them. Not place blame, then vote the other way.
Reagan: "I did not leave the democrat party, they left me!"
Me: "I did not leave the republican party, they left me!"
And both are wrong. We need to get away from the two party system. And have four or five.
Quote:
Originally Posted by John Bull
Without taking the time to go back and do the research, I'll comment just from memory.
Reagan put thru quite a few conservative programs but like Bush I he had to deal with one house of Congress or another in Democrat hands. This forced compromise that was more in the Democrat mode. Thus, so many years later, lazy or duplicitous writers such as Ms. Sahadi can now blame him for deficits that were at the very least caused by those compromises.
RIP Ronaldo Maximus
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All so good point as I see it. One side is very good and getting something they wanted past the other. Then blame the other latter.
Nope blame game is just so wrong.
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09-11-2010, 02:06 PM
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#13
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Valued Poster
Join Date: Dec 31, 2009
Location: In hopes of having a good time
Posts: 6,942
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Quote:
Originally Posted by DFW5Traveler
Urban Institute == liberal think tank... I wouldn't put too much stock in anything they say, since one of the participants, Joyce Foundation, owes it's existance to George Soros.
Membership and Funding
The institute draws its members from the fields of government and community service, academia, journalism, and business. A small group of senior fellows directs institute-sponsored research with the assistance of a research staff of 400. In addition to directing specific projects, senior fellows also conduct independent research, publish in scholarly and mass-market publications, and represent the institute in the media and while testifying before Congress.
See partial list of supporters...
Project Participants
Anne Borland
Vice President, Director of Public Services
The Foundation Center
New York, New York
Kendall Christiansen
Special Projects Officer
The New York Community Trust
New York, New York
Margaret C. Ayers
Executive Director
Robert Sterling Clark Foundation
New York, New York
Bill L. Barnes
Vice President, Development/Special Projects
Christian Church (Disciples of Christ) Indianapolis, IN
Henry R. Brett
Acting Director, Development and Public Affairs
The Asia Foundation San Francisco, CA
Rob Collier
Grants Director
Gannett Foundation, Inc.
Rochester, New York
Carol L. Barbeito, PH.D.
President
C. L. Barbeito, PH.D. and Associates
Littleton, CO
Elizabeth T. Boris
Vice President for Research
Council on Foundations
Washington, D.C.
Charles A. Johnson
Vice President, Development
Lilly Endowment, Inc.
Indianapolis, IN
Sheila A. Leahy
Senior Program Officer
The Joyce Foundation
Chicago, IL
Ruth Mayless
Program Officer
The Ford Foundation
New York, New York
John Kreidler
Senior Program Officer
The San Francisco Foundation
San Francisco, CA
Richard A. Mittenthal
Partner-in-charge: Foundations & Cultural Institutions
The Conservation Company
New York, New York
Alice A. Pinsley, Ph.D., CFP
Planned Giving Consultant
Stamford, CT
Howard Negrin
Director of the Office of Grants & Contracts
Baruch College/The City University of New York
New York, NY
Nancy Pettis
Coordinator of Nonprofit Studies
The Center for Public Policy of the Union Institute
Washington, DC
Benjamin R. Shute, Jr.
Secretary
Rockefeller Brothers Fund
New York, NY
Project Participants
Ian T. Sturrock
Vice President - Development & University Relations
Bradley University
Peoria, IL
Henry C. Suhrke
Editor
The Philanthropy Monthly
New Milford, CT
Russy D. Sumariwalla
Vice President and Senior Fellow
United Way Strategic Institute
Alexandria, VA
John D. Taylor
President
First Bank System Foundation
Minneapolis, MN
Luz A. Vega
Director of Grants Programs
The James Irvine Foundation
San Francisco, CA
Jerrold A. Weitzman
Program Officer
Exxon Corporation
New York, NY
Stephen Wertheimer
Vice President for Development
Baruch College/The City University
New York, NY
Sourced from their own web site.
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Nice recitation. Nowhere in it do you deny the figures in the article. Probably because the figures cannot be denied...they are historical facts.
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09-11-2010, 02:35 PM
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#14
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Valued Poster
Join Date: Dec 23, 2009
Location: gone
Posts: 3,401
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And about as informed as your HDH recommendations.
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09-11-2010, 03:05 PM
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#15
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Valued Poster
Join Date: Dec 31, 2009
Location: In hopes of having a good time
Posts: 6,942
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Quote:
Originally Posted by pjorourke
And about as informed as your HDH recommendations.
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Typical misdirection. Elementary school teachers use this tactic to control 7 year olds. PJ, you aren't that smooth.
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