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I agree with the main thrust of Kevin Williamson’s essay and Joe’s reactions to it. But I think we should be careful not to throw the baby out with the bathwater here. Understood as reductions in marginal income tax rates, the Reagan tax cuts did happen. They did save taxpayers more than $2.5 trillion. They did moderate the upward trajectory of taxes as a percentage of the economy.
The first Reagan tax cut lowered marginal income tax rates by 25 percent across the board. The top marginal income tax rate was eventually reduced from 70 percent all the way down to 28 percent. Income taxes were finally indexed to inflation, eliminating bracket creep. The number of tax brackets was reduced from 14 to just two. Millions of low- to moderate-income Americans were dropped from the tax rolls entirely.
Many of those policies have been eroded — the top tax rate is higher today; there are more tax brackets, as the near-flat tax created by the Tax Reform Act of 1986 didn’t last very long — but none of them have been completely repealed. In addition to the political reasons, this is because there were salutary economic effects. There is a strong case to be made that tax cuts played a role alongside tight money in the policy mix that finally whipped stagflation. And while tax increases to cope with the rising deficit began as early as 1982, Reagan was a net tax cutter and these lower rates were compatible with historic revenue growth over the fullness of time.
This doesn’t change any of Williamson’s main points: We are not as far out on the Laffer Curve as we were before Reagan (though if spending isn’t controlled, we will be again); tax cuts are unsustainable without spending cuts; the Republican Party — with the encouragement of too many conservatives — has increasingly embarked upon a path of high-borrowing “don’t-tax-and-spend.” But Reagan’s tax success was a success. It was simply a success endangered by his failures on spending.
In a discussion on this subject, Paul Ryan once called himself a “second-generation supply-sider”: one who understood the basic insights of supply-side economics while also recognizing our current need to restrain federal spending, a fiscal catastrophe we cannot simply grow our way out of. But just as spending cuts make tax cuts arithmetically possible, tax cuts make a limited-government conservatism politically possible. The two must go hand in hand.
A man of faith in a godless age is hitting Americans where it hurts.
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
In Britain, defending your property can get you life.
The debacle of this president’s administration is both a cause and a symptom of the decline of American values. Unless Congress impeaches him, that decline will go on unchecked. An eminent jurist surveys the damage and assesses the chances for the recovery of our culture.
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
The American Christmas, like the songs that celebrate it, makes room for everybody under the rainbow. Is that why so many people seem to be hostile to it?
Was the President done in by the economy, or by the politics of the economy?