Reagan (loved?) raising taxes

Bruce Bartlett’s a pretty interesting guy.  Having worked for Ron Paul back in the day and Reagan and Bush I, he is definitely a conservative.  But he is a reasoning conservative that liberals can have empirical policy discussions with, which probably means he’s not a contemporary Republican.

Bruce Barlett looking smart

Over the past few years, he has made a name for himself as being an influential conservative willing to call out Republican fiscal policy for the chicanery that it is.  In 2006, he wrote a book to the effect and did the same in September 2007 on the pages of the New Republic.  I learned about all this through David Leonhardt’s profile of him yesterday, which basically recounts the ideas – that the Republican interpretation of the Laffer curve is wrong and a Value Added Tax would be the best way to raise government revenue -  Barlett has been arguing for years.

This is a long way of saying that Barlett, in a column from February in Forbes, answered my bleg of two months ago: Reagan did in fact raise taxes, and he raised them frequently.  Barlett:

According to a recent Treasury Department study, Ronald Reagan proposed the largest peacetime tax increase in American history as part of a budget deal to get the federal deficit under control. The Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982 was signed into law on Sept. 3, and most of its provisions took effect on Jan. 1, 1983. [...]

Reagan signed into law major tax increases every year of his presidency after the first. By the end of his presidency, he took back half of the 1981 tax cut in the form of higher taxes. And it should also be noted that when confronted with a crisis in Social Security in 1983, Reagan endorsed a rescue plan drafted by Alan Greenspan that consisted almost entirely of higher taxes.

To be fair, he had a Democratic House for all 8 years and a Democratic Senate for the last 2.  And his total record is that he cut taxes more than he raised them (which just means that his policies put us further into debt).  On the other hand, the Democrats never even had a enough votes to overturn a veto.  And there’s this institution called the Senate that would not have overrode a veto, so Reagan could have vetoed the tax raises and kicked the can down the road.  And the total pieces of major legislation raising taxes was more than double that of those cutting them.  The hagiographies forget these facts.

In the same article, Bartlett also explodes the causation fears that Republicans make, i.e. that raising taxes means less revenue and growth.   The evidence and logical deductions over the past 30 years have always incontrovertibly rebuffed the idea (the 80s and 90s are both remembered as times of great growth), so I’ll leave the details to Bartlett.  Even worse for current arguments against taxes, Reagan raised taxes during a recession.  I suspect that if Reagan tried to fun for reelection today, he would face a huge primary insurrection; he might prevail, but he would not be at all appreciated by the base.