Republicans

[L'Emmerdeur]

Republicans do indeed love to wave the flag of Reagan tax cuts being 'successful' in raising revenue. The reality is not particularly impressive.

Another serious flaw in the doubling of revenues argument is that it looks at all revenues. The FICA tax rate increased from 6.13 percent in 1980 to 7.65 percent in 1990. To include an increase in revenues gained through a tax hike in order to argue in favor of tax cuts would seem extremely hypocritical. Hence, we need to look only at revenues obtained from individual income taxes. According to the second table, the real growth in individual income tax receipts was 10.1% from 1981 to 1991 and 11.5% from 1982 to 1992. These were the lowest growth rates of any of the 58 10-year spans from 1940 to 2007. However, these record lows were surpassed by the 5 10-year spans from 1998 to 2008 through 2002 to 2012, all of which contained the financial crisis. For these spans, the growth rates were 6.4%, -19.1%, -29.8%, -13.6%, and 3.5%, respectively.

[Emphasis mine--L'E source]

The second table mentioned above can be found here, titled 'Growth of Receipts by Source, Outlays, and GDP: 1950-2021'.

By the way, if anybody cares to read the Wall Street Journal propaganda piece, which is behind a paywall, use the link found here.

[Tero]

Reaganomics never worked.

[pErvinalia]

One of the main concepts is that if you lower taxes on businesses from say 35% to 21%, it will operate as an incentive to economic growth because businesses will have more money in hand with which to operate, expand etc. The trickle down effect is that when business and industry do well, they have to employ people, and those people then get jobs that otherwise might not be there and the companies have more moThe major tax-rate cut of 1986, which took the top income tax rate down to a five-decade low of 28%, passed the Senate 97-3, as the nation enjoyed a long run of growth comfortably over 4% per year.ney to pay employees and offer incentives to employees.

It's been tried in 1986

I'm old enough to remember the 1980s, Ronald Reagan, and the tax cuts. They did work, and the economy improved markedly. http://time.com/4511870/john-f-kennedy- ... ax-policy/ "The major tax-rate cut of 1986, which took the top income tax rate down to a five-decade low of 28%, passed the Senate 97-3, as the nation enjoyed a long run of growth comfortably over 4% per year."

Revenue boomed as a result of the Reagan tax cuts: https://www.wsj.com/articles/reagan-cut ... 1501800678 "The Reagan tax cuts laid the foundation for a quarter-century of strong, noninflationary growth, which, despite three subsequent recessions, averaged 3.4% until the beginning of the Obama administration. And tax revenue was generated by an expanding economy rather than pilfered through bracket creep."

I'm not sure if you have me on ignore or something, but the figure I presented the other day shows that this is nonsense. Tax revenues as a proportion of GDP initially fell under Reagan, and then remained flat for the rest of his term. And as I pointed out in that post, average growth rates where higher between the war and Reagan than after Reagan was voted in.

[pErvinalia]

42: ”However, we can look to the effect that the current tax cut appears to have had, which appears to have been quite positive to the economy.”

It’s had no effect on the economy. Recovery, jobs stocks have been the same as Obama, except stocks have been stagnant for months now.

That's just not in accord with the numbers.

The current tax cut is working a lot like the last four major tax cuts - "These four major tax cuts shared three key economic accomplishments. Gross domestic product went up. Unemployment rates went down. And federal revenues increased substantially after passage and implementation.

What years where the tax cuts? The only significant increase in revenue (as a proportion of GDP) came during Clinton's terms.

[Hermit]

One of the main concepts is that if you lower taxes on businesses from say 35% to 21%, it will operate as an incentive to economic growth because businesses will have more money in hand with which to operate, expand etc. The trickle down effect is that when business and industry do well, they have to employ people, and those people then get jobs that otherwise might not be there and the companies have more moThe major tax-rate cut of 1986, which took the top income tax rate down to a five-decade low of 28%, passed the Senate 97-3, as the nation enjoyed a long run of growth comfortably over 4% per year.ney to pay employees and offer incentives to employees.

It's been tried in 1986

I'm old enough to remember the 1980s, Ronald Reagan, and the tax cuts. They did work, and the economy improved markedly. http://time.com/4511870/john-f-kennedy- ... ax-policy/ "The major tax-rate cut of 1986, which took the top income tax rate down to a five-decade low of 28%, passed the Senate 97-3, as the nation enjoyed a long run of growth comfortably over 4% per year."

Revenue boomed as a result of the Reagan tax cuts: https://www.wsj.com/articles/reagan-cut ... 1501800678 "The Reagan tax cuts laid the foundation for a quarter-century of strong, noninflationary growth, which, despite three subsequent recessions, averaged 3.4% until the beginning of the Obama administration. And tax revenue was generated by an expanding economy rather than pilfered through bracket creep."

This does help maximize the well-being of society.

Going by past experienc, it increases profits and does nothing to help employment or household income. Trickle down economics is a con.

...except that it works, and has been shown to work. The evidence is that it works.

What people forget or purposefully ignore is that before Reagan's overhaul, there was massive stagflation. A stagnant economy, high unemployment (double digit), and high inflation (inflation like 10% annually), and ridiculously high interest rates (in 1978, the fed raised interest rates to 20% to try to stop inflation). The government's revenue was going up annually due to "bracket creep." There were like 15 tax brackets, and inflation of 10% a year, so as people's wages went up following roughly along with inflation,they'd get booted to higher income brackets without actually having more buying power.

Reagan simplified the tax system, and reduced rates considerably, across the board, and it did, in fact, help. Along with deregulation, and other adjustments, inflation was brought down, interest rates were brought down, unemployment was brought down, etc. It's Reagan's policies that had him reelected in a landslide and the good economy was why Bush,Sr. was elected in 1988. George HW Bush swept the country in 1988 - 426 Electoral votes and carried 40 out of 50 states. It wasn't because the economy sucked.

There is no doubt that business did rather well under Reagan's trickle down economics. Corporate profits definitely improved during his presidency.


https://tradingeconomics.com/united-sta ... te-profits


However, you said "This does help maximize the well-being of society". Did it? Let's have a look. Did increased corporate profits lead to a drop in unemployment?


https://tradingeconomics.com/united-sta ... yment-rate

No. Unemployment remained higher under Reagan's eight year presidency than when it started until its last four months, and even when it finally was lower, it was not by much.


So, perhaps salaries and wages went up for those who did manage to hang on to their jobs?


https://tradingeconomics.com/united-states/wage-growth

No again. Except for two brief periods wages were below the point at which Reagan's presidency commenced.

Not even Reagan's cut in personal income tax rates improved the lot of wage earners. During his presidency they managed to put less and less of their income aside in the way of savings. Though inflation was much reduced, it rarely dropped below the 4% mark. This more than destroyed the benefits of those cuts.


https://tradingeconomics.com/united-sta ... al-savings

You keep sticking to the theory. I note you failed to support it with facts. I provided the stats showing how trickle down economics panned out under Reagan. Again, here is the summarised comparison between trickle down theory and trickle down fact.



So again, trickle down economy is a con.

[pErvinalia]

Those spots were I said where instead of were, where really annoying.

[Tero]

Texas!

[pErvinalia]

My god.

[Svartalf]

Reaganomics never worked.

they did, they made the rich richer, and the poor stupider enough to vote GOP...

[Scot Dutchy]

Under Regan the first real fake news appeared. People were told they were better off and it was believed.

[Forty Two]

Hermit, I did not "fail to support it with fact" - the facts are in the links I provided. And, you offer stats from 1980 to 1985 to prove that the 1986 tax cuts did not work. The effect of the 1986 tax cuts occurred after 1986, so in 1987 and 1988 and 1989.

When Reagan left office, real federal revenue was more than 19% higher than it was the day of his first inauguration. A major recession had been overcome, inflation had been broken, the tax code had been indexed to eliminate bracket creep, and the largest tax cut of the postwar era had been implemented. The Reagan tax cuts and the boom they created stand as the most successful policy initiative and recovery of the postwar era—the polar opposite of Mr. Obama’s program and economy.

http://www.aei.org/publication/reagan-c ... ue-boomed/

Economic growth faded as President Obama raised taxes and smothered the economy with unprecedented regulatory burdens.

In 1980, the year before Reagan became president, the Congressional Budget Office reported: “During much of the past decade, many taxpayers have found themselves paying larger fractions of their incomes to the federal government in income taxes.” Double-digit inflation in the late 1970s pushed American families into ever-higher tax brackets (there were 15 at the time). This process, called “bracket creep,” drove up taxes almost 50% faster than inflation, enriching the government while impoverishing workers.

Thus even though the 1970s were the postwar era’s weakest decade of economic growth up to that point, federal revenue doubled between 1976 and 1981. Inflation averaged 9.7% during the economic malaise of 1977-80, while government revenue grew by an astonishing 14.8% a year, even as economic growth rates fell steadily and turned negative in 1980.

Nobody old enough to have lived through it would trade 1979 for 1988 economically - on any measure - revenues, GDP, unemployment, inflation, interest rates, etc. It was the tax overhaul, deregulation and privatization that combined to create the foundation for the late 1980s and 1990s.

[Forty Two]

Under Regan the first real fake news appeared. People were told they were better off and it was believed.

They were better off. Under Carter, inflation and short term interest rates reached double digits, sucking the economic life out of the common person. Gas lines stretched around the block away from petrol stations. Mortgage interest rates were up over 18%. An 18% mortgage is a huge tax on a person's income, compared to the eventual reduction of interest rates on mortgages, and rates dropped every year after Reagan took office. Nobody would trade 1988 for 1978 in the US.

[Joe]

Nobody old enough to have lived through it would trade 1979 for 1988 economically - on any measure - revenues, GDP, unemployment, inflation, interest rates, etc. It was the tax overhaul, deregulation and privatization that combined to create the foundation for the late 1980s and 1990s.

Once again, the St. Louis Fed disagrees:

Unbeknownst to many, last fall was the silver anniversary of a watershed moment in Fed history and the economic history of the country. On Oct. 6, 1979, Fed Chairman Paul Volcker took dramatic steps to rein in the runaway inflation that had been sapping the strength of our economy since the mid-1960s. Without his bold change in monetary policy and his determination to stick with it through several painful years, the U.S. economy would have continued its downward spiral. By reversing the misguided policies of his predecessors, Volcker set the table for the long economic expansions of the 1980s and 1990s.

Ignore it all you like, but you are repeating political spin. Economic reality is that the impact of Presidents is overstated. I'll let Kevin Williamson explain it for you:

But this isn’t about data. It’s about bug-eyed, bone-in-the-nose, bark-at-the-moon primitivism.

We like to think that we have left behind such ancient notions as divinely sanctioned kingship and rule by chieftains who propitiate the gods and therefore make the fields fertile and the livestock fecund — or else displease the gods and bring upon us drought and plague. But we haven’t.

One of the great enduring stupidities of the American presidential cult is the belief, rooted in invincible ignorance, that the state of the U.S. economy at any given moment is a reflection of the intelligence and wisdom of the chief executive of the federal government and a result of the excellence or insufficiency of his administration. “Sure, Bill Clinton may have been an intern-diddling hillbilly and maybe even a violent rapist, but, man, my IRA kicked ass in the 1990s!”

It’s dumb, but it rules politics.

Go read the whole article, and the dozens more like it you can find by googling "do presidents affect the economy," and quit peddling this simplistic nonsense.

It's no sin to be ignorant, Forty Two, but staying that way is.

[Hermit]

Hermit, I did not "fail to support it with fact" - the facts are in the links I provided. And, you offer stats from 1980 to 1985 to prove that the 1986 tax cuts did not work. The effect of the 1986 tax cuts occurred after 1986, so in 1987 and 1988 and 1989.

I offered statistics spanning the entire period of the Reagan presidency. The charts prove that while corporate profitability has experienced a definite improvement (chart 1) in those same eight years the well-being of society has definitely worsened (charts 3 and 4).

[Tero]

Here we go. Ruin healthcare even for seniors!
https://thinkprogress.org/republicans-v ... a9bcbba7d/