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February 03, 2011

What Would the Tea Party Think of Reagan Tax Policy?

Walter Shapiro notes that even though Ronald Reagan "persuaded a Democratic Congress to approve his massive 1981 rate reductions, the Gipper reversed field in 1982 to staunch the deficit and agreed to a tax increase (equal to about one-third of the original cuts). That single act of tax realism would have prompted today's tea party movement to denounce Reagan as a RINO (Republican in Name Only) and to threaten to find a real conservative to challenge him in the GOP primaries."

"That was nothing compared to the tax-code apostasy of Reagan's second term. He championed, and in 1986 signed into law, a sweeping bipartisan tax reform bill that (warning: be sure you are sitting down before reading further) raised capital gains taxes. In one of the great progressive reforms of the last half century, Reagan eliminated tax loopholes and special preferences like capital gains in exchange for lowering individual tax brackets. At the core of Reagan's tax reform triumph was the liberal principle that unearned income (stock market swag) should be treated the same ways as an autoworker's wages."


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