Invasion of the Body Snatchers III, Starring Ronald Reagan

My Commentary magazine cover story, “The Liberal Misappropriation of Ronald Reagan,” is out in the October issue.  Unfortunately it is behind a subscriber firewall for the time being; the link here is to the abstract only.  But this gives you a good reason to subscribe!

But here’s one excerpt about Obama’s abuse of Reagan:

WE CAN START with Obama’s use of Reagan’s words about “raising revenue from those who are not now paying their fair share,” which the current president deployed to place Reagan’s imprimatur on his own support for tax increases to reduce the deficit. Reagan spoke those words about a budget deal struck with Congress before the 1982 elections. That deal, which came to be known as TEFRA (the acronym for the Tax Equity and Fiscal Responsibility Act), featured what was then, to date, the largest tax hike in American history. TEFRA came a little more than a year after the enactment of the Kemp- Roth bill—which slashed marginal tax rates at every level by 23 percent over three years, and which was the heart of what came to be known as “Reaganomics.”

Obama’s appropriation was and is disingenuous on every level. When Obama says, “fair share,” he means something very specific: higher marginal income tax rates on the group he calls “the rich.” This is the polar opposite of Reagan’s policy approach in 1982. All of the “tax increases” to which Reagan agreed as part of TEFRA were temporary excise hikes on cigarettes and telephone calls. The bill also featured technical changes in the tax code (like the elimination of depreciation schedules and the reduction of tax credits and deductions).

Reagan understood that not all taxes are created equal, nor do they have the same effect on economic performance, and he believed that his tax cuts had to be permanent to have a positive effect on the economy (in line with Milton Friedman’s permanent-income hypothesis). Thus he adamantly refused to consider any changes in the 1981 marginal-income-tax cuts, even as the revocation of those changes became the chief liberal domestic-policy objective from 1981 onward. Indeed, when the economy tipped into recession in the fall of 1981, leading to the ballooning of the budget deficit, the first and leading demand of Democrats was to cancel the third year of the income tax cut and roll back the elimination of “bracket creep.”

Reagan never budged an inch, then or in the rest of his presidency. And his stubbornness was the cause of outrage so universal among liberals that they deafened themselves to the populist appeal of Reagan’s supply-side policies—so much so that Walter Mondale came to believe it was a sensible strategy to tell the American people in his 1984 acceptance speech at the Democratic National Convention that he was going to raise their taxes.

 

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