America made an economic turning point 25 years ago, thanks to Ronald Reagan’s tax cuts, argues Pete Du Pont in a Wall Street Journal op-ed piece. “We should remember 1981 as the year the kaleidoscope turned in America, a dividing point between the previous two decades’ big-government beliefs and the individualism and market economy thinking of the next 20 years,” Du Pont writes.
The evidence is in the economic numbers, he contends: Real annual growth in gross domestic product went from averaging just more than 2.3 percent a year in the late 1960s and ’70s to averaging almost 3 percent a year from 1982 to 2000. Also, the Dow Jones Industrial Average declined to 875 in 1981 from 995 in 1965; in the next 18 years it rose to 11497.
To maintain this course, Du Pont recommends continuing President Bush’s lower tax rates on income, dividends and capital gains; moving to a flat tax; and bringing the rapid growth of government to an end.
What do you think? How much of America’s prosperity is the result of Reagan’s tax cuts? What about other factors, such as the technology and productivity boom? And given that Reagan couldn’t control government spending and Bush has been even worse, will more tax cuts mean more record deficits?
Posted by Phillip Brownlee
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21 Comments
Who cares. We have RECENT issues to argue about. :)
What’s interestimg about Reagan’s philosophy on taxes is they mirror JFK’s.
My second biggest gripe about Bush, spending. Spending like a drunken Democrat. I let them know every time I get a solicitation for campaign contributions.
If you cut taxes and revenue increases by 20 percent but you increase spending by 35 percent did a bear really shit in the woods?
Reagan didn’t have Republicans in control of both houses of congress. He got his increased defense spending and the Democrats got their increased domestic spending.
It’s time to end the manipulative income tax system and go to a consumption tax. The means for funding government should not be a means for manipulating and shaping society.
http://WWW.FAIRTAX.ORG
When congress first passed an income tax, it was for 1 % and designed to stick-it the “the rich.” The “then” Supreme Court found it to be in violation of the fourth amendment { “The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated” }, so congress petitioned the States for a constitutional amendment for income tax. It passed, but didn’t stay at 1% for long and quickly worked its way down to the working man’s pocket.
That’s the nature of government.
Pierre (Pete) Du Pont, one of the richest men in America wants to tell the rest of us what’s good for us.
Under raise taxes Clinton, real wages went up 7 out of 8 years and the debt went down.
Under lower taxes Reagan and Bush 1 and 2, wages mainly fell (they’ve fallen for all five years under Bush), income inequality has risen, poverty rates have gone up five years in a row.
Why should I or anyone else care about GDP growth if all the benefit flows to top management and health care costs and none of it is returned to the workers who produced that increased wealth–which happened under Reagan, Bush and is happening under this Bush.
I rather have a “no growth” economy in which everyone benefits than a hot economy in which the great majority don’t benefit . . . which is what we’ve got now.
I think that letting people keep more of what they earned is always a good policy. Especially when so much of government spending at all levels is simply taking the property of one person and giving it to another.
Heckler,
“Spending like a drunken Democrat” may be Bloviating Bill O’Reilly’s favority saying these days, but the facts are that under Clinton-Gore, the budget was balanced and the national debt was paid down.
Bush and the Republican Congress aren’t spending like Democrats, drunken or not. They’re spending like the CRONY CAPITALISTS they are . . .
“I think that letting people keep more of what they earned is always a good policy.”
And I for one vote to let the paved road in front of your house revert back to dirt.
If you want gov’t services, and I do, you have to pay for them.
ProudLib
It’s not the spending on roads that bothers people about taxes. It’s taking one persons money and giving it to another based upon some politicians definition of “fairness” that bothers people.
ProudLib
The budget was balanced under Clinton/Gore because a Republican congress made it that way. What goes through their mind now is beyond me.
Tax cuts are effective to the extent that money goes into the hands of unemployed. Being unemployed often means that what these folks would purchase is not being communicated to the markets,and THAT economic activity does not occur. Giving more money to the already fully employed is primarily a redistribution of wealth, and what economic activity increase does occur is primarily through productivity increases of those already fully employed.
George H.Bush called it right. Talks cuts for the fully employed is “vodoo economics”.
According to many in Congress back in 1993 Clinton’s budget proposals he barely got through would destroy the economy because they undid so much of the Reagan actions.
As for Trust-baby DuPont his business acumen has not been proved to be all that good. The company he inherited much of suffered under his leadership (just like with Grace)
I’m pretty sure I paid for the entire cost of the road in front of my house through the special taxes assessed on it. Since that road benefits few people but me, I thought it reasonable to ask me to pay for it.
Furthermore, isn’t a major source of funding for roads the motor fuel tax, which attempts (to some degree) to ask people who use a resource to pay for it?
“If you cut taxes and revenue increases by 20 percent but you increase spending by 35 percent did a bear really shit in the woods?”
OMG, somebody get Rhonda’s fainting couch again. I agree with Heck on this statement!
]
KCL – the Kellogg project is supported by sales tax on groceries.
The repos keep pusting for smaller government. I’ll tell you why. The smaller the government the better controlled government.Less regulations so you can see 10 ounce packages of food being only 5 ounces. Safty regulations, out the wildow. All our national parks sold to Enron type corps for their privet hunting preserves. Laws against hunting deer that only the privileged few will partake.
We need a large enough government to protect the little mankind.
We need more taxes and less borrowing.
Our economy may be great for the stock traiders, CEOs and those that have big money now. But what about the former factory worker, how are they fairing in this great economy?
I heard today many of our collage grads are going over to India to get the good jobs. Is this the wave of the future?
“It’s not the spending on roads that bothers people about taxes. It’s taking one persons money and giving it to another based upon some politicians definition of “fairness” that bothers people.”
I know exactly what you mean, Heckler. Take for instance the case of the oil and natural gas lying under public waters in the Gulf of Mexico. That’s mine and yours and everybody else’s in this country.
Big Oil expects to extract 65 Billion dollars over the next five years. Because of “royalty relief” passed years ago when oil was one-seventh the price of what it is now, Big Oil will not have to pay “We the People” 7 billion dollars in royalties.
Not only that, but Bush has vowed to kill a bill that passed the Republican-controlled Senate on windfall oil profits that will cost “We the People” another 5 billion dollars.
So when BushCo. redistributes wealth away from its true owners, you and me, and gives it all to the people who pump it from the ground, that’s welfare for the rich at its worst.
*****
“The budget was balanced under Clinton/Gore because a Republican congress made it that way. What goes through their mind now is beyond me.”
That’s really disingenuous. Clinton/Gore passed their tax increases–that balanced the budget and reduced the national debt–with every single Congressional Republican voting AGAINST.
Yeah, some help they were . . .
Republicans = Big Govt. and Big spending. Facts are Republican presidencies have never decreased the size of govt. or spending.
Not surprising to find that heckler is an adherent to that pig Neil Boortz.
Fair tax my ass. It is feudalism pure and simple.
Oh but the subject was how Reagan fitted into this. Simple. The rich get richer.
Now I voted for Ronald Reagan in 1984. It was the first time I was old enough to vote. I voted a straight GOP ticket.
It was also the last time I voted GOP on anything.
Ronald Reagan, history reveals to us, was a sellout. A good democrat and union leader, he let his greedy wife manipulate him to work for the forces that would pay him the most.
Since Reagan? Unions and worker rights virtually destroyed. Average pay of CEOs increased by a thousandfold while worker wages regress. American trade deficit, a function of companies enabled to avoid tax laws, breaks records every year.
Oh but the puppeteeers of Reagan were AMATEUR compared to the puppeteers of Bush.
Elimination of estate tax perpetuates that those who have the money get to continue to concentrate it to theselves. Capital gains tax repeal means that those greedy stockholders get to keep all of the money that outsoourcing this nations capacity to make almost anything to cheap foreign labor brings.
” A rising tide lifts all boats” John Kennedy said that. When he said that taxation of the super wealthy was at 90% as he argued to cut those taxes. This quote is oft repeated these days.
Thing is? These days the “rising tide” lifts a fleet of super battleships with their guns squarely trained on me on my leaky inner tube while I fight over that inner tube with Mexicans and Chinese who’d be happy to take my inner tube and live under those big guns and be thankful for it.
Sigh………I’m no socialist. I did vote Reagan once….a lifetime ago. But you folks who want the continued accumulation of capital to the few? You might best look at Russia circa 1917. Push hard enough and long enough and too much is never enough, and you might find an outcome that you really do not like.
Not all evils. But most of them – yes!