The “Reagan Deficits”

During the 1980’s Congress, under pressure from President Reagan, passed a series of tax rate cuts. Tendentious professors of history typically refer to the Reagan era tax acts as “tax cuts,” rather than “tax rate cuts,” implying that they caused a loss of government revenue. The half of history that you won’t learn in college is that the rate cuts of this era did not reduce government revenues at all. A spreadsheet of revenues and spending is available from the Congressional Budget Office, and the objective truth is that government revenues went up, not down, during Reagan’s presidency.

A typical university textbook describes the rate cuts this way: “By 1986 a series of tax cuts had benefited the wealthy by reducing top personal income tax rates to 28 percent and lowering capital gains, inheritance, and gift taxes. To compensate for the lost revenue, Reagan proposed massive spending cuts.”

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