A Lesson For Republicans

Bruce Bartlett explains why Reagan's tax cuts wouldn't work as well now as they did then:

It’s important to remember that inflation was the central economic problem at the time Reagan endorsed the tax plan that had been developed in Congress by Congressman Jack Kemp of New York and Senator Bill Roth of Delaware, which proposed cutting the top income tax rate from 70 percent to 50 percent and the bottom rate from 14 percent to 10 percent.

 

The Consumer Price Index rose 4.9 percent in 1976, 6.7 percent in 1977, 9 percent in 1978 and 13.3 percent in 1979. At the same time, unemployment was stubbornly high, averaging 7 percent from 1975 to 1979.

 

One of the key problems that the Reagan-Kemp-Roth plan was designed to deal with was bracket-creep. Since the tax system was not indexed at that time, whenever workers got a cost-of-living pay raise they got pushed up into higher tax brackets even though their real income had not risen. Consequently, the average federal income tax rate on a four-person family with the median income had risen from 7 percent in 1965 to 11 percent in 1978, and the marginal tax rate – the tax on each additional dollar earned – rose from 17 percent to 25 percent.

Unfortunately, Republicans seem to think that tax cuts always stimulate the economy, bring rain, cure cancer and make the blind see.  It would be nice for them to acknowledge that the Bush tax cuts haven't done a damn thing to help this country, and have only made large deficits even larger.  Bartlett has, and that's why he's been kicked out of the wingnut welfare apparatus.