The Specter of Reagan Haunts the GOP’s New Tax Plan

A brief history of how the GOP taxes the poor to reward the rich.

Joel Bleifuss January 10, 2018

In a cartoon by Gary Huck that ran in the Aug. 12, 1981, issue of In These Times, White House budget director David Stockman, known as the “father of Reaganomics,” answers questions.

Sev­en months after Pres­i­dent Ronald Rea­gan took office, he signed the Eco­nom­ic Recov­ery Tax Act of 1981. Like the Tax Cuts and Jobs Act of 2017 that hur­tled through the GOP Con­gress this past Decem­ber, Reagan’s tax cut took from the poor and gave to the rich. As Rea­gan explained dur­ing his Sept. 21, 1980, pres­i­den­tial debate with John Ander­son, the cuts also promised an addi­tion­al ben­e­fit: slash­ing the government’s allowance” and forc­ing spend­ing cuts.

Both the budget cuts and the tax cuts are primarily a transfer of income from working people and the poor to the super-rich individuals and giant corporations that promoted Reagan.

In his Aug. 12, 1981, edi­to­r­i­al, Next Time, Busi­ness Will be to Blame,” In These Times found­ing Edi­tor & Pub­lish­er James Wein­stein wrote:

Both the bud­get cuts and the tax cuts are pri­mar­i­ly a trans­fer of income from work­ing peo­ple and the poor to the super-rich indi­vid­u­als and giant cor­po­ra­tions that pro­mot­ed Rea­gan. This, not the pompous busi­ness about rein­vig­o­ra­tion of the sys­tem,” [Har­vard econ­o­mist John Ken­neth] Gal­braith asserts, is the true moti­va­tion of the tax (and expen­di­ture) cuts.” …

With the lib­er­als’ fail­ure to sus­tain growth and sta­bil­i­ty, there were, in the­o­ry, two paths open for the coun­try. One was greater social con­trol of invest­ment, so that the country’s social ills could be ratio­nal­ly con­front­ed. The oth­er was an attack on the poli­cies of recent decades as being already too social­is­tic, a reliance on pri­vate prof­it as a motive and a fur­ther strength­en­ing of the large cor­po­ra­tions as a method to stim­u­late the econ­o­my. With a Left total­ly in dis­ar­ray and unpre­pared to meet the chal­lenge, and a Right heav­i­ly financed and well orga­nized with­in the Repub­li­can Par­ty, there was nev­er a con­test. So now we have Reagan’s new” part­ner­ship of the cit­i­zen and busi­ness being put for­ward as America’s great hope. …

While doing what it can imme­di­ate­ly to min­i­mize the Rea­gan administration’s attacks on Social Secu­ri­ty, safe­ty and health reg­u­la­tion, pub­lic edu­ca­tion, sup­port for low-income hous­ing, mass trans­porta­tion and social ser­vices in gen­er­al, the Left must also begin think­ing about the not-so-dis­tant future when it will be called upon to offer a com­pre­hen­sive, con­struc­tive pro­gram of its own.

There is one sig­nif­i­cant dif­fer­ence between 1981 and 2017. In 1981, Reagan’s tax cuts were passed by the Demo­c­ra­t­ic-con­trolled House (by a vote of 282 to 95) and the Repub­li­can-con­trolled Sen­ate (67 to 8). In 2017, not one Demo­c­rat in either cham­ber sup­port­ed Trump’s tax bam­boo­zle. It remains to be seen whether the Dems’ resolve will trans­fer into full-fledged sup­port for pro­gres­sive pol­i­cy alternatives.

Joel Blei­fuss, a for­mer direc­tor of the Peace Stud­ies Pro­gram at the Uni­ver­si­ty of Mis­souri-Colum­bia, is the edi­tor & pub­lish­er of In These Times, where he has worked since Octo­ber 1986.

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