Posted on 10/20/2001 1:22:23 PM PDT by porgygirl
One great line of many in the book. Thanks for posting it.
Before you rip Egregious Philbin, you should ingest a dose of your own logic and clarity. These income tax revenue numbers from The Ronald Reagan Home Page show that tax revenue actually dropped from 1981 to 1985, and did not exceed 1981 levels until 1986, when cap gains was raised from 20% to 28% and the Alternative Minimum Tax (AMT) was hiked so upper-income brackets paid at least 31%. The $325 billion in 1987 was only a 4% increase in real dollars over 1981, and the $349 billion in 1988, Reagan's last year in office, was a modest 11.7% increase over 1981.
In fact, the total revenue under the tax structure of 1981-88 was $2489.3 billion ($2.49 trillion), less than the $2500 billion total revenue if the baseline $312.5 billion level of 1981 had simply been maintained in 1981-1988.
Accompanying this wash in real tax revenue, of course, was a period of deficit spending unprecedented in U.S. history. The tax aspect of trickle-down economics was modestly effective at best, and the bulk of the dollars came from the Federal Reserve Peter to subdue the Evil Empire Paul. While I support the latter, let's be honest about how it was financed.
In the interests of clarity and logic, I highly recommend reading the Economic Report of the President recommended by porgygirl in post #3. See page 20, which details that real median family income was flat 1973-1993, despite a 57% increase in real output over the same period. Note too the shares of money income by quintile.
Over the longer run, what has taken the big hit is consumer savings, which has fallen from 6.5% in 1958 to a puny 0.4% in 1998. This reduction in savings is one reason why the Fed interest rate cuts have been modestly effective; lacking consumer savings, lower interest rates have less effect in spurring demand. Consumers are tapped out.
In the wake of the Taxpayer Relief Act of 1997, median family tax burden is fairly close to 1985 levels, with most of the increase due to state and local taxes, plus increased payroll taxes for Social Security, Disability Insurance, and Medicare. Taxes now claim a greater share of the median two-income family's income (39.0 percent) than food (8.9 percent), clothing (3.9 percent), housing (15.9 percent) and transportation (6.9 percent) combined. The key point is that the situation has not changed that much from 1985. The biggest difference is that under X42, the Defense budget got hacked all to hell, which is how the Dems achieved their "economic miracle" and reduced budget deficits.
In the interest of solutions, as opposed to merely pointing things out or complaining, one of the best ways to beef up Defense without breaking the bank, IMHO, is to significantly strengthen the Marine Corps. Nothing against the other services, but the Corps provides excellent incremental bang for the buck, and they're particularly well-suited to the kind of asymmetric threats that are likely to be our biggest problems in coming decades. Second priority would be to bolster human intelligence overseas.
Don't get me wrong--Thomas Sowell is one my favorite counterweights to the lib towel-chewers, but the above article is not that compelling. Read the book or any of his many excellent columns.
With this as an opening you launch into a discourse on the the tax revenues of the eighties, something neither Philbin nor I mentioned. Although it was well done, I will check its accuracy later, I don't see the point in directing it to me. Care to elaborate?
Beyond generalities, you didn't mention much.
Sowell's piece certainly mentions taxes. He states, ironically that "the most gross misstatements of issues can live on, despite readily available facts to the contrary." He then proffers as an example the "folklore of liberal politics and the liberal media that Ronald Reagan's tax cuts were responsible for the deficits of the 1980s." "...rather than explain for the zillionth time the fallacy in all this," Sowell suggests we consult the statistics.
Egregious Philbin refers to those statistics, and so do I. Sowell's rhetoric aside, it is hardly the case that all liberals ascribe the Reagan deficits solely to tax cuts.
The economic report in question, after all, was created on X42's watch, and much as DU isn't my cup of tea, I credit liberals with generally understanding both the tax revenue and defense expenditure components of the Reagan deficits. The cuts had relatively little to do with it, although revenue did in fact drop for several years, and only recovered after boosting cap gains and the AMT. Sowell's contention that more revenue was taken in during the Reagan years than in any other administration ignores a lot, not least an eight year term, as well as the biggest deficits between revenue and expenditures of any administration.
Egregious made some reasonable criticisms and you ripped him. I went a little further and pointed out specifically where Sowell does what he criticizes. My point in addressing you is you imply in your post that Sowell's discourse validates the thesis of your post--something to the effect "conservatives are terse and use facts, whereas liberals are just obfuscatory liars".
No.
Greege, were on the same page re Sowell. I have to go off and conquer other stuff around the house right now, but if you follow the article back to the source, you might find the archive of back articles that might answer yoiur questions.
Re your observations on some "conservative" posters.... regrettably true. I was attacked and piled on a few weeks back and accused of being not just a homosexual, but a homosexual child molester for suggesting that accusing a dem candidate of being a closet homosexual simply because you don't like him might be slanderous or even libelous. This is the internet, after all, and you're gonna run into all types.
A friend of mine observed that some people (the Buchanan Brigadiers i.e.) go so far to the right that they come around at you from the left. This is perhaps evident in the "anti-Free Trade" crowd, who are indistinguishable as right wing nuts or commie bolsheviks when they attack trade policies.
Gotta go...
I stand by that as a general statement. Of course, few statements can be all inclusive and I did not intend that all Conservatives use fact-based arguments nor that all Liberals are liars. However, on the political front, that is generally true and it is the main reason Conservatives get clobbered in the media.
As far as the Reagan tax cuts, it is well known and often stated that the first two or three years after an across the board tax cut that tax revenues will decrease. That is simple logic. After that the additional money in the pockets of people finds its way into the economy. That brings about increased economic activity and the logical increase in taxes collected. When the Cap. Gains increases and AMT were enacted Reagan agreed to it with the promise by the Democrat-controlled Congress that for each dollar of tax increase there would be two dollars of spending cuts. After Reagan signed the bill the Democrats immediately broke their promise and went on a spending spree. (GHWB should have paid attention as they did the same to him in inticing him to go against his "read my lips...." pledge. They also blackmailed him with vowing not to fund the Gulf War unless he increased taxes. That gave us Clinton/Gore.) That was the primary reason for the record deficits, not defense spending. Predictably, the Democrats still spread the lie, the one you are repeating, of Reagan being responsible for the deficits. RWR was a tax cutter and against big government,the opposite of the Dems who are big spending/big government types. Now where in your opinion does the likelihood of record deficits lie - among the big spenders/big government types or with the small government/cut spending advocates?
The numbers tell the story. Deficit spending was never greater than during the Reagan administration. And yes, it was a combination of Dem social largesse and defense spending. Under X42, the former continued while defense took a haircut.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.