In Thursday night's debate on Idaho Public TV, GOP congressional candidate Raul Labrador disputed that President Ronald Reagan raised taxes as part of a deal with Democrats to help balance the budget.
I posed the question, and interrupted Labrador when he asserted my premise was false. Here, I'd like to set the record straight. My source is Bruce Bartlett, historian and expert on supply-side economics, who was an adviser to Reagan and the first President Bush. Bartlett calls the first Reagan tax hike "the largest peacetime tax increase in American history."
In a 2003 essay in the conservative National Review, Bartlett wrote that the total of Reagan tax hikes -- including increases in income, Social Security, unemployment, cigarette and fuel taxes -- were costing taxpayers $300 billion in real dollars.
Labrador's spokesman, Phil Hardy, declined comment on Friday.
Here's an excerpt from Bartlett's piece:
"Reagan may have resisted calls for tax increases, but he ultimately supported them. In 1982 alone, he signed into law not one but two major tax increases. The Tax Equity and Fiscal Responsibility Act (TEFRA) raised taxes by $37.5 billion per year and the Highway Revenue Act raised the gasoline tax by another $3.3 billion.
According to a recent Treasury Department study, TEFRA alone raised taxes by almost 1 percent of the gross domestic product, making it the largest peacetime tax increase in American history. An increase of similar magnitude today would raise more than $100 billion per year.
In 1983, Reagan signed legislation raising the Social Security tax rate. This is a tax increase that lives with us still, since it initiated automatic increases in the taxable wage base. As a consequence, those with moderately high earnings see their payroll taxes rise every single year.
In 1984, Reagan signed another big tax increase in the Deficit Reduction Act. This raised taxes by $18 billion per year or 0.4 percent of GDP. A similar-sized tax increase today would be about $44 billion.
The Consolidated Omnibus Budget Reconciliation Act of 1985 raised taxes yet again. Even the Tax Reform Act of 1986, which was designed to be revenue-neutral, contained a net tax increase in its first 2 years. And the Omnibus Budget Reconciliation Act of 1987 raised taxes still more.
The year 1988 appears to be the only year of the Reagan presidency, other than the first, in which taxes were not raised legislatively. Of course, previous tax increases remained in effect. According to a table in the 1990 budget, the net effect of all these tax increases was to raise taxes by $164 billion in 1992, or 2.6 percent of GDP. This is equivalent to almost $300 billion in today's economy."
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