On reading the Friday letter to lower the sales tax, which will therefore cause a “tremendous boost of retail and commercial sales,” I had to once again shake my head at how people still follow old beliefs like sheep. As if trickle-down economics works.
We had two huge tax cuts in 2001 and 2003 and the only major creation of new jobs was in the military fighting wars in the Middle East. But what of Ronald Reagan’s huge tax cuts? When Reagan took over, we were starting to come out of a bad economic situation. Reagan’s tax cut and massive spending dug us in even deeper. By November of 1982, unemployment was at 10.8 percent and going up. What did Reagan do to turn that around?
Now, here’s the part nobody ever talks about: He pushed through one of the largest tax increases in history, the Tax Equity and Fiscal Responsibility Act of 1982. This tax increase was second only to the tax increase of 1942 to pay for World War II. Reagan also raised payroll taxes on Social Security but capped it so that the middle class pays into it all year long, but the rich stopped paying in after earning their first $90,000. He did, however, keep lots of tax breaks in place for his rich friends, and took us from being the largest creditor nation to being the largest debtor nation in his first four years.
This information is available from the U.S. Treasury. Just look for Working Paper 81. Or go to Factcheck.org and type in “Largest tax increase in history.”
You have to tip your hat to the Republicans on this one, though. Only they could convince millions of people that you can make more money by making less money.