The Wall Street Journal
Comments by Jim Campbell
Revisionist historians would have us believe that the tax policy of Art Laffer, implemented by President Ronald Reagan adversely affected the U.S. Economy when the opposite is the case. Who you going to believe, the socialists professors or me?
In the link above Professor Paul Krugman tells us, that “Reaganomics” was a failure. The Reagan economy was a one-hit wonder. Yes, there was a boom in the mid-1980s, as the economy recovered from a severe recession. But while the rich got much richer, there was little sustained economic improvement for most Americans. Yea Mr. “I’ve never lived a day in the private sector,” sing to your choir nobody else can hear your pitch.
That’s my story and I’m sticking to it, I’m J.C. and I approve this message.
For 16 years before Ronald Reagan’s presidency, the U.S. economy was in a tailspin—a result of bipartisan ignorance that resulted in tax increases, dollar devaluations, wage and price controls, minimum-wage hikes, misguided spending, pandering to unions, protectionist measures and other policy mistakes.
When Reagan entered center stage. His first tax bill was enacted in August 1981. It included a sweeping cut in marginal income tax rates, reducing the top rate to 50% from 70% and the lowest rate to 11% from 14%.
What the Reagan Revolution did was to move America toward lower, flatter tax rates, sound money, freer trade and less regulation. The key to Reaganomics was to change people’s behavior with respect to working, investing and producing. To do this, personal income tax rates not only decreased significantly, but they were also indexed for inflation in 1985. The highest tax rate on “unearned” (i.e., non-wage) income dropped to 28% from 70%. The corporate tax rate also fell to 34% from 46%. And tax brackets were pushed out, so that taxpayers wouldn’t cross the threshold until their incomes were far higher.
The true lesson to be learned from the Reagan presidency is that good economics isn’t Republican or Democrat, right-wing or left-wing, liberal or conservative. It’s simply good economics. President Barack Obama should take heed and not limit his vision while seeking a workable solution to America’s tragically high unemployment rate. Will he? Unlike Bill Clinton who would do anything to get reelected, Obama will cling to his Marxist ways.
Over the past decade, states without an income levy have seen much higher growth than the national average. Which state will be next to abolish theirs?
Barack Obama is asking Americans to gamble that the U.S. economy can be taxed into prosperity. That’s the message of his campaign for the Buffett Rule, which raises income-tax rates on millionaires to a minimum of 30%, and for the expiration of the Bush tax cuts. He wants to raise the highest income tax rate by 20%, double the rate on capital gains, add a new 3.8% tax on all capital earnings, and nearly triple the dividend tax rate.