Reagan’s Tax Increases
I think it’s reasonable to assume that Simpson, like almost all Republicans in the Senate in the 1980s, probably voted for the many tax increases supported and signed into law by Ronald Reagan, which eventually took back half of the 1981 tax cut (see below).
It may come as a surprise to some people that once upon a time in the not-too-distant past Republicans actually cared enough about budget deficits that they thought raising taxes was necessary to bring them down. 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.
He’s got a handy-dandy chart at the link.
I was reminded when refreshing my memory of the 1982 tax hike this morning of a 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.” He details those in the column.
Why did Reagan, who believed fervently in the power of low taxes, nonetheless wind up signing into law increases that gave back more than half of the tax cuts he signed in his first year? Bartlett says it’s simple:
But when all the political and economic elites of this country gang up on a president to raise taxes, history shows that they always get what they want. Indeed, they were even able to get Bush’s father to raise taxes in 1990, even though his political advisers knew that it would likely lead to his defeat in 1992, which it did.
How do the elites break down presidential resistance to tax increases? They do so by promising the moon. Tax increases, they say, will lead to huge reductions in interest rates, which will power economic growth and reduce unemployment. The rich only pay them anyway, which makes the president look like a populist. And tax increases are the price that must be paid to get spending cuts.
This last point is especially laughable. In 1982, Ronald Reagan proudly announced that he was getting $3 of spending cuts for every $1 of tax increase. He later lamented that all he ever got were the taxes. “Congress never cut spending by even one penny, ” Reagan complained in 1993.
As politically unpopular as raising taxes is, cutting spending is much, much harder. And it’s getting harder by the day, as the share of the budget going to entitlements and interest on the debt increases and therefore “discretionary” spending becomes an ever smaller slice of the pie.