Well, that is probably true. But imbedded in this statement is an example of what someone here on the SDMB (I honestly forget who) has dubbed the new post-modernism of the Bush Administration and other conservatives. Basically, when confronted by evidence on something, they retreat to this point-of-view of things being open to a variety of different interpretations and it being impossible to ascertain the truth. Thus, any statistical claim or scientific or economic argument is as good as any other. To this I say “Bullshit!”
No, he also told the vodka/food stamps story, along with the welfare cadillacs.
Someone even pointed out that change from an orange would not be enough to buy vodka, but he didn’t care. (And even if you could find vodka that cheap, I don’t think you’d want to attempt to drink it.)
Iran Contra is bad either way you look at it-if he was involved, he committed a serious crime and should have been indicted. If he wasn’t, then apparently he was so out of touch his staff was able to screw over Congress and carry out their own foreign policy, without being answerable to anyone.
Both scenarios are extremely scary.
However, when he said he didn’t remember-I believe him. I think he was already starting to suffer from Alzheimers.
Hell, even Barry Goldwater said that what Reagan and company were doing down in Central America was disgusting. Is Barry Goldwater a member of the “fringe left?”
(And don’t even get me started on Nancy and the astrologers. ASTROLOGY!!! If someone came on the SDMB with that kind of crap, we’d laugh them into Kingdom Come!)
That is quite an abrupt dismissal of the 1993 tax bill, focused on at least partially restoring the burden on the wealthy, and which was derided by the Republicans as “the largest tax bill in history” (it passed without a single Republican vote in the Senate, but that hasn’t stopped them from claiming credit).
Clinton even did mention, at a fundraising address full of fatcats, “I may have raised your taxes too much.” It did, as your Revel quote suggests, “reduce rather than exacerbate the inequalities, particular in the area of taxes.” Quite the point - it was a partial correction to Reagan’s “voodoo economics”, intended not only at balancing the budget, something every Reagan budget got further away from, but at restoring some social equity.
Harrumph. Hadn’t economies grown quite a bit *and with near- balanced federal budgets * under many previous administrations - including Eisenhower’s with its 80 percent top bracket? Reagan’s budgets were simply living off the national credit card. What is it that he proved that we didn’t know before?
What acts of appeasement are you referring to? Something you’re conflating with the policy of containment that had been in place since 1945?
Perhaps you would be willing to define that term for us in more detail as you mean it, and how it was ever “lost” for America. You mean something more than a feeling of “riding tall in the saddle”, I sincerely hope.
Perhaps the observation was inspired by Josh Marshall:
By comparison, David Broder had a Reagan anecdote that explained what many of us knew all along:
To say something nice about ol’ Ron, he did inspire that awesome comedy skit from Saturday Night Live where Phil Hartman plays Reagan as a super-genius whenever he’s out of the limelight. 
Link here (MP3 audio file)
Nothing. Absolutely nothing new under the sun there. It’s just that some people, blinded by ideologue, needs to be shown again and again. And since zero-sum economics is still a cornerstone of communistic and socialistic lore 24 years after Reagan’s first period – it seems it needs to be stressed still more that that is in fact bollocks. I find it a bit ironic how liberals are desperately clutching at economics and deficit spending and such. Doesn’t it move your liberal heart in the least, that the suppressed masses of erstwhile totalitarian dictatorships consider Reagan and his politics to be their liberator? That they took heart in his “stupid, simplistic” description of the evil empire? etc.
Well, okay, I am glad to see that what was written was not as bad as what I inferred from your brief summary in the previous post(and not as bad as the stuff that one sees on the WSJ editorial page.) I’m not sure where that data quoted comes from. The data from the Internal Revenue Service, via the Tax Foundation, doesn’t separate off the top 20% but their numbers for the top 25% are these: Effective federal income tax rate of 19.7% in 1980 and 19.1% in 2000. (They don’t have 1979 numbers. These numbers are based on adjusted gross income.) The CBO numbers for the top quintile are: Effective federal income tax rate of 15.7% in 1979 and 17.1% in 1999.
So, admittedly, the data from the CBO show the same trend as the numbers he quoted (i.e., a rise in the effective tax rate) for the top quintile. The data from the Tax Foundation, as close as we can get, shows a slight fall. However, there are some nice deceptions in what data has been chosen:
(1) The claim is made that one can look at the entire twenty year period because “the policies of the Republican Reagan [were] continued for the most unaltered by Democrat Clinton.” However, if one actually considers only the Reagan Presidency, one does not in fact find the same trend. For example, the CBO data show a drop in the effective rate for the top quintile from 16.7% in 1981 to 14.6% in 1989 (with a drop as low as 14.0% in 1985, before some of the supply-side policies were reversed). The corresponding data from the Tax Foundation / IRS shows the drop in that period being from 20.1% to 16.3%. Both then show a bouncing around with some small rise during the Bush Administration and then more rise during the Clinton Administration.
(2) Also, details depend on what data you look at to represent the top 1% and whether you look at all federal taxes or just income taxes. For example, if you look at the top 1% and look at the total effective federal tax rate, then the CBO calculates the effective rate goes from 37.0% in 1979 to 31.8% in 1981 to 25.5% in 1986 before starting back up again with the reversal of some of the supply-side policies, so it is at 28.9% in 1989. [A part of all this is due to the drop in corporate taxes, and one can argue about whether the CBO assumption of assigning all of corporate taxes to shareholders makes sense or not.] The Tax Foundation / IRS data for the top 1% also shows a significant drop although I just noticed that there is a fairly large discontinuity (jump down) between 1986 and 1987 when the defn of AGI changed, so it is not clear how reliable it is. The CBO data is probably better.
The one thing that is true, although unrelated to Reagan’s policies in regards to the rich, is that there has been an increase in progressivity at the low end of the scale in the last 20 years, due to the expansion of the earned income tax credit for example (which can actually make their effective income tax rate negative). However, even there, the CBO data shows that most of this has occurred after Reagan left office…And, in fact the poor’s effective federal income tax and effective total federal tax rates actually went up through 1984 and then started down, particularly in 1987 after the Tax Reform Act of 1986.
He did this how? I don’t see real evidence of this. As I noted, the poor did see their real incomes decrease between 1979 and 1989 according to the CBO data. Sure, it is not strictly a zero-sum game. But, what I think the Reagan era showed is that it is quite possible to implement policies that benefit the rich greatly while benefitting the poor and median income people essentially nil.
Quick before I go to bed. Apparently from among other sources reports from the “Congressional Budget Office” dated April 2002 also spelled out in the magazine The Economics April 15, 2002 in an article, ironically, titled: “The Age of Fiscal Socialism”
who’s gonna tuck me in?
To be fair, the CBPP data for 1979-1989 is a little biased in looking at the Reagan years by including the last two years of the Carter Administration during which we were going into recession. If you look at the years 1981 to 1989, the true Reagan years and also the years that correspond to going from a valley of the economic cycle to a peak (at least in terms of the average after-tax real income, since it hit a minimum in 1981 and a peak in 1989), one finds the following growth in the after-tax real income:
Lowest quintile: +2%
Middle quintile: +9%
Top quintile: +33%
Top 1%: +74%
All (i.e., average income): +19%.
So, while it is true that everyone gained during this period, which is true in general when one looks over long enough periods…especially from near the minimum of an economic cycle to the peak…the gains were very unevenly distributed, as reflected both by looking at the different quintiles and at the differences between the gain in average income vs. that of the median income (as approximated by the average income of the middle quintile). [I also think I remember reading that the gains that were made in median household income were due to more hours worked while the median real wage did not increase, and in fact may have decreased, over that time.]
As I noted, the boom over the Clinton Presidents (1993-2001) also saw unequal gains in income (this is not purely the fault of Republican policies) but not as unequal:
Lowest quintile: +11%
Middle quintile: +13.5%
Top quintile: +26%
Top 1%: +55%
All (i.e., average income): +19%.
So, what we see is that there has been a general explosion of inequality over the past 20 years but that the growth in real incomes was considerably less unequal during the 8 years of the Clinton Administration than during the 8 years of the Reagan Administration. (And, coincidently, the growth in average real incomes over these 2 eight-year periods was essentially the same at 19% for each.)
I’m really having a hard time making sense of this paragraph. You really shouldn’t try to use fancy words if you don’t understand how to properly put them in a sentence.
That’s twice now that you have composed a long well thought out, very well cited, well researched post with what seems like an intention to mislead. The first time you claimed that the rich did increase thier share of the tax burden, but not as fast as they increased their share of the income. Conveniently leaving out that the share of the tax burder paid by others also grew slower than the rate at which their share of the income grew (I know some groups lost share, but their share of the tax burden fell faster). That is all income groups paid a lower share of the total tax burden compared to their share of the total income. The way you presented it, you implied that the rich got rich on the backs of the poor. Which is patently false.
I’d just like to add, that I don’t think you understand supply side economics the way you think you do. True, many proponents suggested that cutting tax rates would allow the economy to grow enough to make up for the income shortfall. However, removing loop holes (and more importantly the incentive to find new ones) was always a part of the dogma. That is, suggesting that the reduced loop holes in the 1986 tax reform act were somehow a “reversal of some of the supply-side policies” is not accurate. I specifically remember Reagan demonstrating the absurdatiy of the old tax code with a bill which was heavier by weight than necessary.
Finally, I think there is a case to be made that the policies of the 1990s were a continuation, partially, of the Reagan ideals. Remember, we aren’t talking about small changes on the order of 10%. We are talking about huge changes like taking the top rate from over 70% to under 30%. That is, I think it is inaccurate to suggest that tax policiy returned to the pre Reagan era during the 90s.
Thanks for the link to the new CBO data. I had not seen that yet.
Then on preview, I see you added to it.
To be fair, would you not have to compare the inequality rates from the 70s or 60s to say that we have had an explosion? Perhaps I am misunderstanding your use of the term. 
Thank you for this, blowero. I was getting depressed in this thread (it is a little dismal). Your post gave me a refreshing laugh.
rjung: Just what value does Isaac Asimov bring to this discussion? Who gives a rat’s ass what he thought? I’m unaware of any special knowledge he had in foreign policy or military matters.
And I have seen the fact that he starred in a movie with a chimpanzee mentioned recently - in an article about scurrilous attacks. I mean, really. Why would anyone even offer as an argument the fact that he starred in a movie with a chimp? What does that have to do with anything?
But hey, since you’re trying to appeal to authority with the Asimov quote, I’ve got your trump card right here:
- **Mikhail Gorbachev**
But there’s more! Gorby also said this today:
You know you’re way out there when you find yourself to the left of Mikhail Gorbachev.
Come on pervert. For one thing, the sentence that you highlighted was meant to refer to the growth in real income. It had nothing to do with the share of the tax burden / share of the income issue.
For a second, I did not try to mislead at all. I simply avoided getting into this side issue you speak of by not even specifically noting that the share of income increased by a factor of almost 2.5 while the share of the income tax increased only by a factor of 2. Instead, I kept it vague by noting that “So, what one finds is that while the richest 1%'s share of the contribution to personal income tax revenues doubled, this is because their share of the income more than doubled!” because I didn’t want to get hijacked into gory details. pervert is right that there is a subtlety here…Technically speaking, one wants to compare not the factor by which their share of total income increased to the factor by which their share of the total taxes increased, but instead one wants to look at the ratio of the share of this groups income to the share of everyone else excepting this group’s income. For example, one wants to compare 0.0846/(1-0.0846) to 0.2081/(1-0.2081) [because the income share went from 8.46% to 20.81%]. And then one wants to compare 0.1905/(1-0.1905) to 0.3742/(1-0.3742). Doing this, one finds that the income share normalized in this way went up by a factor of 2.84 (that is the ratio of the income share of the top 1% to the income share of everyone else excluding the top 1% went up by a factor of 2.84) while the tax share normalized in this way went up by a factor of 2.54 (that is the ratio of the income tax share of the top 1% to the income tax share of everyone else excluding the top 1% went up by a factor of 2.54)…which puts the numbers a little closer to the factor of 2.46 and 1.96 one gets without doing such normalization but doesn’t change the basic story.
So, yes, pervert, you are technically right that you want to do this sort of thing in order not to arrive at a contradiction such as the idea that “everyone is above average” (in this case, that everyone was advantaged). But, since it didn’t change the basic story and I was only going for the qualitative result, I left out these gory details. Are you happy now, pervert?
[Actually, I should add that I think this way of doing thing guarantees not getting the “everybody above average” contradiction although I can’t remember if I ever proved it to myself.]
Well, I agree that the conservatives…and many liberals…have also talked about simplifying the tax code and reducing perverse incentives and so on. But, I would not say this is what supply-side economics is all about. All economists agree that one can change incentives in a microeconomic sense through taxes…e.g…, if you significantly increase the tax on a specific item such as cigarettes, you won’t get as much revenue as you would predict by multiplying the current amount of cigarette packs bought by the amount of increase per cigarette pack because people will cut back on their cigarette purchases. In fact, as I understand it, the CBO takes into account such effects in estimating the revenue change from changes in the tax code.
What is controversial, and where supply-side ideas come in, is when people talk of changes in the tax code causing significant macroeconomic effects, e.g., tax cuts causing higher GDP growth for the whole economy and thus causing an increase in revenues that has a significant offsetting effect to the reduced revenues due to the lower tax rate. In fact, there are plenty of supply-side true believers who claimed…and amazingly still claim…that one can (in our current real world) cut taxes and yet get more revenue because the GDP growth the tax cuts cause more than offset the less in revenue from the lower tax rates. [They even draw the famous “Laffer Curve” to illustrate this point.]
Of course characterizing exactly what qualifies someone as a “supply-sider” is subtle. After all, few economists would argue that tax cuts have no effect on GDP growth, particularly when the economy is slack (i.e., during a recession). And, few economist would disagree with the idea that such tax cuts could have quite a large effect if the economy was truly in a very highly taxed state. However, what I think defines a supply-sider is the idea that this is a truly significant effect in our current economy (and, as I noted, there are some people who still true to argue that we are actually at a point where we can lower tax rates and get more revenue because of the greater GDP growth).
As a final note: the reason I am calling the 1986 act a partial reversal is not because I think any tax change that plugs loopholes but reduces nominal rates is to be considered a reversal. I agree it shouldn’t necessarily be so. However, it appears that the net effect of all of these changes was to increase effective tax rates back up somewhat (and I believe that was the goal since by this time they were very concerned about the deficits). That is the sense in which I think of it as a partial reversal of the supply-side policies.
Well, when the tax rates were 70%, there were lots of loopholes. I agree that we did not go all the way back to the pre-Reagan era during Clinton. But, if you look at the effective tax rates computed by the CBO, I think you’ll see that we went a fair ways back. To classify it as just continuing Reagan’s policies and, in particular, the sort of policies now being pursued again by Bush (while pointing to the early 80’s policies of Reagan for justification), is incorrect. However, I am perfectly willing to give Reagan some credit for realizing the errors in his supply-side ways if, in return, we don’t have to repeat the mistakes of the past!
I think you are. By an “explosion” I meant that inequality has increased rapidly. This is true…If all the income groups saw the same growth in real incomes in percentage terms, then the inequality would have stayed the same. (Here, using the common measure of inequality as being some sort of ratio between top incomes and bottom incomes.) Since the top folks have seen their income rise by a much higher percentage than the bottom folks, inequality has grown significantly.
If you are saying that the term “explosion” implied to you not only that inequality increased rapidly but that the rate at which it was increasing also went up significantly, then I’ll note that this is not what I meant by “explosion” since I don’t have the data to support that claim. (Although I do have a vague notion from things I think I’ve read and heard that it may very well be true. I just don’t know where to find the pre-1979 data on real incomes of the various income groups.)
jshore, what pervert said about the tax code: no one can argue that it’s anywhere close to where it was before 1986. You have to have an AGI of 174,700 before going above 28%, even today, so even now, 18 years later, it’s still possible to make out the contours of that aging beauty. Of course, the capital gains rate has long since been made lower than the rate for ordinary income, destroying pretty much the entire point of the exercise both for the left and for the cause of simplifying the tax code, because as soon as you introduce the idea of different rates for different types of income you introduce as well the idea of tax shelters, but that’s the Dems’ fault for not understanding how important it was to preserve that. Or, better put, it’s a simple fact that most legislators are lawyers and have no self-interest at all in a simple, effective tax code.
As for the fall of The Wall, Reagan shares credit for that with Walesa, the Pope, Havel, and the firing squad that rid us of Ceausescu, or whatever that pompous, brutal ass’s name was. However, if the people of Eastern Europe are willing to give Reagan the primary credit, I’m not about to dissent from that view. They were there, and they certainly know, far better than I, who to credit for their freedom.
Sam, you do realize that Gorby was referring to Reagan’s willingness to negotiate towards the end of his second term with those comments, don’t you? Gorbachev’s comments in that article, and his op-ed in the NYT today both make very similar comments. But he says nothing whatsoever that could be taken as suggesting that Reagan’s hard line in the early 80’s contributed to anything.
Two points here:
(1) Everyone is eulogizing Reagan upon his death. As has been noted, Kennedy and Kerry had very nice things to say. That’s how this stuff is done (except here on the SDMB where we don’t have to act like politicians or statesmen).
(2) You left out this part of the story:
So, it sounds to me that Gorbachev is praising Reagan for eventually adopting more accomodating policies, such as essentially those of the nuclear freeze movement, which you blasted the other day.
Like I said in regards to the economics stuff, I am willing to give Reagan the man some credit for changing course if that means that we don’t have to go back to the policies that failed and can instead stick with the things that seemed to work better. In fact, the more I am reminded about how Reagan was willing to modify his policies in light of new evidence and situations, rather than just blindly sticking to his ideology, the more nostalgic I grow for him!
For God’s Sake, I’ll be overjoyed to call Reagan the most wonderful President ever (even if I don’t believe it) if such praise is not used to justify such things as wrong-headed supply-side pipe dreams and magical defense shields from nuclear weapons!
BTW, on behalf of the left side of my body, I have to say that I’m firmly convinced that Reagan was, for most if not all of his term, a bought and paid for agent of a foreign power and implacable enemy of the US, namely Iran.
The simplest explanation for Iran/Contra is that it was the favor Reagan owed to the Iranians for them holding onto the hostages until his Inauguration. It’s the simplest explanation of the whole affair and ties the entire thing together.
But look at the effective income tax rates computed by the CBO: The top 1% paid 21.8% in 1979 and 24.1% in 2001; the rate had dropped as low as 18.3% in 1986. In terms of the total effective federal tax rate (which is probably a more realistic assessment), the top 1% were paying 37.0% in 1979 and are paying 33.0% today; the rate had dropped as low as 25.5% in 1986. So, while I am not claiming that the various tax changes since 1986 have led to a complete reversion back to pre-Reagan era, I do think they have changed back in that way quite substantially…And, of course, I think that’s a good thing.
[I should note that the Tax Foundation /IRS data do not show nearly this much of a bounce-back in the effective income tax rate for the top 1%. It went from 34.47% in 1980 down to 23.25% in 1990 before rising to 27.5% in 2001. This makes me wonder about how trustworthy that Tax Foundation data is using the AGI. I am a bit confused by the fact that the data there shows such a large jump down between 1986 and 1987 in the average effective income tax rate, while neither the income share data nor the tax share data show such a discontinuity. What I think this suggests is that the definition of AGI changed enough that one cannot really compare effective tax rates before and after 1986/1987 using the Tax Foundation data. This also throws the share data into question; however, the fact that there was no sharp discontinuity there gives one hope that the definition in income changed in such a way that it sort of had a fairly equal effect on all income groups and thus didn’t throw the share data out of whack. Still, maybe I should be using the CBO numbers rather than the Tax Foundation / IRS numbers to compare income share and tax share. Noone said this stuff was easy!]
Well, as I’ve posted before, I can only go by my own experience, given how devilishly complex the tax code is, and say that it’s way easier on people with money than people without. The most merciless tax there is is the SSI/Medicare tax, which is only assessed on the first part of your income, at a flat 7.67%. No getting around it.
As for the income tax, I currently use the following exclusions/deductions:
- 401(k): fully funded: 13000.
- Transportation credit: to 1000.
- Medical account: 3000.
So my AGI is reduced by the above by 17000.
Then there are the deductions:
- Personal/family exemptions: approximately 4000 apiece, or 12000 total.
- Mortage interest: 17000 or so.
- Real estate tax: 7000 or so.
The above totals about 36000. This of course doesn’t include whatever I choose to make in charitable contributions, or whatever other miscellany happens to fall out.
If you don’t have much money, you’re probably either renting or paying too little in mortgage and taxes to qualify for any deduction. You’re not going to be able to fully fund a 401k, assuming you even have a job that offers one. You won’t be taking any extra money out of your paycheck to pay for medical or for transportation, because your cashflow would be too low to allow it (I’ve been there, I know whereof I speak).
Which is why I get so exercised about the idea that Democrats would allow a situation where capital gains are taxed at a lower rate than ordinary income. This is obscene. I’d love to see a Democrat who actually understood what the party is supposed to stand for, the same way Reagan did for the Republicans.
I’m still waiting for this, as I have for the entirety of my adult life.