President Joe Biden’s economic team is being advised to shift away from budget-busting spending to cutting taxes like former President Ronald Reagan did 40 years ago to spark an economic and job creation revival.
Several economic advisers, celebrating the August 1981 passage of the historic Reagan tax cuts, told Secrets that helping Main Street build back better instead of putting the country on the federal dole is the answer to growth.
“There could not be a more stark contrast between the positive impact they had on the economy of the time and the war on small business that President Biden and Democrats are currently waging. When President Reagan signed the Economic Recovery Tax Act, the largest tax cuts in history at the time, it empowered businesses to lift the economy out of the stagflation of the 1970s. President Biden should remember this. He was in the Senate at the time,” said Alfredo Ortiz, the president and CEO of the Job Creators Network.
“At his Inaugural Address, Reagan famously said, ‘Putting America back to work means putting all Americans back to work. Ending inflation means freeing all Americans from the terror of runaway living costs,’” said Ortiz, adding, “So far, Biden has created a labor shortage that is crippling small businesses and caused historic inflation that’s exceeded wage growth, resulting in a ‘Biden pay cut’ for workers.”
Heritage Action Executive Director Jessica Anderson also urged the White House to look to Reagan’s model as a winner.
“Americans nationwide should celebrate the 40th anniversary of President Reagan’s historic tax cuts and the prosperity they unleashed for American families. But the anniversary is also a wake-up call: President Biden is currently working to destroy that prosperity with historic tax increases,” she said.
Many members of the Reagan alumni and conservative economic advisers in Washington and California have been celebrating the tax cuts in recent days, recalling the fight to win approval and the economic boom times that followed.
“Forty years later, it is hard to overstate the truly historic nature of the Reagan tax cuts. When President Reagan came to power, the highest marginal tax rate was a whopping 70% and his reforms brought that down to 28%,” said former Ohio Treasurer Ken Blackwell.
The cuts, which sparked the term “Reaganomics,” also cut the lowest bracket from 14% to 11%, putting more money into people’s pockets.
Onetime presidential candidate Steve Forbes said Reagan’s 1981 Economic Recovery Tax Act “slashed income tax rates for everyone. It increased incentives for business investment. It allowed all working taxpayers to establish IRAs (Investment Retirement Accounts). It indexed tax brackets for inflation which would prevent taxpayers from being pushed into higher tax brackets even though their real incomes hadn’t gone up. It whacked the capital gains tax. It sharply boosted exemptions for the death tax.”
The publisher added, “These cuts, when fully phased in combined with the Federal Reserve finally ending the terrible inflation of the 1970s and early 1980s, kicked off a fantastic economic boom.”
Stephen Moore, who recently worked with President Donald Trump’s team, said Reagan’s plan had staying power.
Moore, a Washington Examiner columnist and the co-founder of the Committee to Unleash Prosperity, said, “One of the most impressive repercussions of the Reagan tax cuts has been their staying power. While federal income-tax rates have ranged between 30% and 40% since Reagan left office. This is nowhere near what income taxes were in the 50 years before he took office. In that time, the top tax rate never dropped below 63%.”
Recent polls have shown a desire for additional tax cuts. The Club for Growth, for example, provided poll data showing 72% of voters and 61% of Democrats think high taxes are a problem and 64% want to stop deficit spending, such as Biden’s infrastructure scheme.
“After four years of flirting with Socialism under President Carter, President Reagan’s tax cuts breathed new life into the economy, bringing more opportunity and prosperity. We remember this, which is why voters, including Democrats, continue to believe taxes are too high despite what the Squad might claim,” said David McIntosh, the president of the Club for Growth.
And, added Jenny Beth Martin, the honorary chairwoman of Tea Party Patriots Action, “As we are now seeing some of the worst inflation in many years, we must remember how our economy can prosper when the American people are allowed to keep and control more of their own money, rather than the government.”
