Reagan; Taxes

Mitt Romney seems to have no better memory of Ronald Reagan's presidency than the pundits who are trying to rehab The Gipper's record on race.

In this case, however, the memory failure involves taxes. Speaking to Wolf Blitzer on CNN a moment ago, Romney tried to make an unfavorable comparison between Reagan and Mike Huckabee, who is running neck and neck with him in Iowa.

Says Romney:

"Ronald Reagan would never have raised taxes the way Mike Huckabee did."

This assertion is every bit as false as the claim that Reagan did not intend to stoke the racial fears of white southerners when he spoke lovingly of "state rights" in Philadelphia, Mississippi.

But don't take my word for it. Listen to conservative economist Bruce Bartlett, a domestic policy advisor to... President Ronald Reagan.

Reagan may have resisted calls for tax increases, but he ultimately supported them. In 1982 alone, he signed into law not one but two major tax increases. The Tax Equity and Fiscal Responsibility Act (TEFRA) raised taxes by $37.5 billion per year and the Highway Revenue Act raised the gasoline tax by another $3.3 billion.

According to a recent Treasury Department study, TEFRA alone raised taxes by almost 1 percent of the gross domestic product, making it the largest peacetime tax increase in American history. An increase of similar magnitude today would raise more than $100 billion per year.

In 1983, Reagan signed legislation raising the Social Security tax rate. This is a tax increase that lives with us still, since it initiated automatic increases in the taxable wage base. As a consequence, those with moderately high earnings see their payroll taxes rise every single year.

In 1984, Reagan signed another big tax increase in the Deficit Reduction Act. This raised taxes by $18 billion per year or 0.4 percent of GDP. A similar-sized tax increase today would be about $44 billion.

The Consolidated Omnibus Budget Reconciliation Act of 1985 raised taxes yet again. Even the Tax Reform Act of 1986, which was designed to be revenue-neutral, contained a net tax increase in its first 2 years. And the Omnibus Budget Reconciliation Act of 1987 raised taxes still more.

The year 1988 appears to be the only year of the Reagan presidency, other than the first, in which taxes were not raised legislatively. Of course, previous tax increases remained in effect. According to a table in the 1990 budget, the net effect of all these tax increases was to raise taxes by $164 billion in 1992, or 2.6 percent of GDP. This is equivalent to almost $300 billion in today's economy.

I say all this not to besmirch Reagan's reputation, but simply to set the record straight.

Bartlett wrote this in 2003 in the National Review. Somebody should e-mail the link to Mitt Romney.

_{Photo courtesy of the Ronald Reagan Presidential Library}