Reagan Raised Taxes At Least 7 Times, Including the Biggest Corporate Tax Hike Ever

Republican former Sen. Alan Simpson — who was a friend of Pres. Ronald Reagan and who was conservative enough to be elected to the Senate three times by voters in Wyoming, Dick Cheney’s home state — is fed up by what the called the “myths and misconceptions and the distortions” about Reagan’s record on raising taxes.

Simpson, who serves on the federal commission charged with finding solutions to lowering the national debt, spoke out during a recent public hearing.


SEN. SIMPSON: Now if we’re going to work through the myths and misconceptions and the distortions, and as one president said, “plain damn lies.” I forget what president — I think it was Harry [Truman]. Uh, I’m going to say one.

Some groups seem to bring up Ronald Reagan. We’ll hear from those this afternoon — with a deserved reference, which is very appropriate. Uh. In the words memorialized in the vice presidential debate, I knew Ronald Reagan. They are not Ronald Reagan “knowers.”

In his diary books, I’m proudly mentioned many times. He was a dear friend, and a total realist as to politics.

I didn’t come to this commission to raise taxes. That’s the myth. But I’ll tell ya, they’ve got to be on the table and they are on the table. So I’ll get my share of crap on that one.

But let’s just disengage ourselves from the myth that Ronald Reagan never raised taxes. He did. And here are four big ones. So I hope this will clear the air for some of the groups today.

In 1982, the Tax Equity and Fiscal Responsibility Act, that rolled back about a third of his ‘81 tax cuts, raised corporate tax rates, and to a lesser extent income tax rates. Raised taxes by almost 1 percent of GDP, which at that time was the largest percentage in peacetime increase ever.

[The] 1982 gas tax increase. [The] 1983 Greenspan commission — we know so well; [fellow commission member Alice Rivlin] remembers — we all … raised payroll taxes for lower and middle income households to higher than they were before Reagan’s ’81 tax cuts. Then there was the 1984 deficit reduction tax.

Those are the big four. Then there was the Railroad Retirement Revenue Act, Consolidated Omnibus Budget of ’85… ’85…’87 Continuing Resolution, Omnibus Budget Reconciliation Act of ’87, that was $8.6 billion

So there were a lot of them. Just thought I’d throw that in.

According to Josh Green, writing for Washington Monthly, Reagan’s 1982 tax hike raised $100 billion over three years, which at the time was the biggest tax increase since World War II. He also raised the tax on gasoline that year, as Sen. Simpson noted, and then raised taxes overall again in 1984 — the year he was reelected — by $50 billion over three years, primarily by rewriting the code to close business loopholes. In his second term, Reagan’s historic Tax Reform Act of 1986 increased taxes on corporations by $120 billion over five years — the largest corporate tax increase in history.

Beyond taxation — and judging by what he did, rather than by what he said, as president — Reagan’s standing as an icon of rigid fiscal libertarianism is not the only “damned lie” about his ideology, according to Green:

A sober review of Reagan’s presidency doesn’t yield the seamlessly conservative record being peddled today. Federal government expanded on his watch. The conservative desire to outlaw abortion was never seriously pursued. Reagan broke with the hardliners in his administration and compromised with the Soviets on arms control. His assault on entitlements never materialized; instead he saved Social Security in 1983. And he repeatedly ignored the fundamental conservative dogma that taxes should never be raised…

Rather than abolish the departments of Energy and Education, as he had promised to do if elected president, Reagan added a new cabinet-level department–one of the largest federal agencies–the Department of Veterans Affairs…

[In 1983], Reagan made one of the greatest ideological about-faces in the history of the presidency, agreeing to a $165 billion bailout of Social Security. In almost every way, the bailout flew in the face of conservative ideology. It dramatically increased payroll taxes on employees and employers, brought a whole new class of recipients–new federal workers–into the system, and, for the first time, taxed Social Security benefits, and did so in the most liberal way: only those of upper-income recipients. (As an added affront to conservatives, the tax wasn’t indexed to inflation, meaning that more and more people have gradually had to pay it over time.)

In 1983, Reagan also signed the Railroad Retirement Revenue Act that raised 1.2 billion. For what’s worth, that same year, Reagan’s approval rating hit bottom — 35 percent — according to Gallup.

Bruce Bartlett, an economic policy adviser to Reagan and Treasury official under Bush I, slices and dices the numbers differently and comes up with 11 tax increases but a lower final tally:

Tax Increases
Billions of Dollars
Tax Equity and Fiscal Responsibility Act of 1982
Highway Revenue Act of 1982


Social Security Amendments of 1983


Railroad Retirement Revenue Act of 1983


Deficit Reduction Act of 1984


Consolidated Omnibus Budget Reconciliation Act of 1985


Omnibus Budget Reconciliation Act of 1985


Superfund Amendments and Reauthorization Act of 1986


Continuing Resolution for 1987


Omnibus Budget Reconciliation Act of 1987


Continuing Resolution for 1988


Total cumulative tax increases


Reagan’s profligate ways did not begin when he was president. He raised both spending and taxes during his two terms as governor of California, from 1967 to 1975:

As governor, Reagan was the biggest California spender of the last half century. Under him, state spending leaped 177 percent. And as president, he spent like the proverbial drunken sailor to expand the Navy and the nuclear missile arsenal while winning the Cold War. He left Washington with a then-record national debt.

His first year as governor, Reagan raised taxes equal to 30 percent of the state general fund, still a modern record. And as president, he increased taxes several times, although conservatives pretend to remember only the one big tax cut.

As governor, Reagan protected the spectacular John Muir Trail in the Sierra from highway builders and Central Valley business interests. He blocked dam building on the Eel and Feather rivers. He and Republican Gov. Paul Laxalt of Nevada set aside their aversion to centralized, intrusive government and created a bi-state agency to control growth at Lake Tahoe.

Reagan signed legislation creating the California Air Resources Board, leading to the nation’s first tailpipe emissions standards.

Of course, none of these aforementioned facts can ever counter the propaganda about Reagan that fills the airwaves of Fox News and AM radio or the talking points of right-wing ideologues like Sarah Palin. Facts do not matter to the Republican base, including especially those in the base’s current incarnation as tea baggers.

The Reagan myth is fundamental to the tea baggers’ drive for ideological purity — to their relentless purging of realists, like Reagan, and moderates, like the first Pres. Bush, from the conservative movement.

In the long run, the nation will benefit from the extreme right’s irresistible urge to roust reasonable people from their movement because eventually they’ll shrink it “down to the size where we can drown it in the bathtub,” as anti-tax fanatic Grover Norquist might say. This will be a net positive for the country because the United States has historically done well during periods when conservatives are neutered — see World War II, for example, after Republicans were sidelined in disgrace after their fiscal policies had caused the Great Depression, and the 1960s, when the GOP was vanquished after their McCarthyite pogroms in the 1950s had revealed the hollowness of their paranoid core.

In the short term, however, the tea baggers are not done, not hardly. So, for the rest of this election cycle and beyond, the best advice for normal Amercians is “Fasten your seat belts. It’s going to be a bumpy night.”


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  • Bill
    February 26, 2011 - 7:54 pm | Permalink

    Parties are Owned by the Banksters, both of them.

    America is a 1 party system and has been.


  • J. Griffith
    July 12, 2011 - 2:13 am | Permalink

    The Republicans actually made Reagan an Saint! He raised taxes at least 7 times in 8 years as President. Today it is not the politicians who issue the orders. It is Grover Norquist a self-appointed leader. I thought the last wooden dummy to speak at all was Charlie McCarthy. I was wrong .. all the dummies have escaped the asylum.

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