Tuesday, October 17, 2017

No sir, Reagan did not need years for tax reform

From Tax Notes:
Trump alluded to former President Ronald Reagan’s long journey to pass tax reform, noting that he has been in office for only about nine months. “I would like very much to see it be done this year. . . . If we get it done, that’s a great achievement. But don’t forget, it took years for the Reagan administration to get taxes done,” 
This is not accurate.

Reagan "got taxes done" with the Economic Recovery Tax Act in 1981,  enacted in the first year of his Presidency.  That law slashed the top income tax rate from 70% to 50%.  How did that happen?  Reagan made it a priority right out of the gate, he didn't defer all legislative action until after the August recess.  As the Republican Congress did.

I am generally a Trump supporter, but this comment makes me wonder if the President has any idea what he is talking about.

Oh, I suppose Trump might be referring to the 1986 bipartisan tax reform, the law that briefly brought the top rate down to 28%.  That was an historic achievement, and the country would be well served by simply re-enacting that legislation, word for word.

But it was ERTA '81 that ignited the stock market and the economy in the 1980s. The boom was well under way by the 1984 election, which was two years before the 1986 tax bill.

Trump needs to get this done.  Republicans need to stop dithering.

No comments: