It seems hard to even imagine, but in Ronald Reagan’s first term, he signed off on a series of tax increases — even when unemployment was nearing 11% — and proceeded to raise taxes seven out of the eight years he was in office. It’s a record Republicans find terribly inconvenient, but “no peacetime president has raised taxes so much on so many people” as Reagan.
Of particular interest is the “Tax Equity and Fiscal Responsibility Act of 1982,” the largest of Reagan’s tax increases, and generally considered the largest tax increase — as a percentage of the economy — in modern American history. (The ecoomy began booming in 1983, by the way.)
To hear the GOP tell it, President Obama’s debt-reduction plan would break the record and be the biggest tax hike in history. They’re mistaken.
The right’s first mistake is contextual. Reagan approved a massive tax increase during peacetime after inheriting a modest deficit (which he proceeded to grow dramatically), while Obama is recommending a tax increase in a time of war after inheriting an enormous deficit. It’s also probably worth noting that Reagan’s tax hike passed Congress, and Obama’s tax proposal won’t.
But as Brian Beutler reports, the bogus Republican claim also fails as a simple apples-to-apples comparison.
Assessing new revenue as percentage of GDP, it turns out Obama’s tax proposals would rank below a law signed by President Ronald Reagan on the list of significant tax increases of the last five decades. […]
When Republicans call Obama’s plan the biggest tax increase in history, they’re using a “current policy baseline.” In other words, they assume today’s tax rates are fixed, and complain that Obama’s plan would raise revenue thereupon by quite a bit — $1.57 trillion over 10 years. By this measure, as a percentage of GDP, Obama’s “tax hike” is smaller than Reagan’s 1982 Tax Equity and Fiscal Responsibility Act and the Revenue and Expenditure Control Act of 1968 but larger than Clinton’s 1993 tax increases and George H.W. Bush’s 1990 bill, as well as Reagan’s 1984 Deficit Reduction Act.
I know the GOP won’t want to hear this, but Ronaldus Magnus will almost certainly get to wear the crown of Biggest Tax Hiker for a very long while.