Obama and the Age of Reaganomics

Certain ideas get so firmly fixed in some folks' brains that no amount of evidence can dislodge them. Such ideas become articles of faith. And one article of faith that is particularly deeply stuck in the minds of "the faithful" is that Reaganomics doesn't work.The big idea behind Reaganomics is that cutting tax rates boosts the economy, which results in more tax revenue. The history of the last three decades bears this out.The faithful have tried to disprove Reaganomics by contending that the 1993 tax rate hike is what gave us the good economy and the balanced budgets of the 1990s. This is pure speculation, because the faithful don't know what GDP and federal revenue would have been had rates remained lower.But the bigger problem for the faithful is this: Reagan's 28-percent top rate on the Feds' largest source of revenue, the Individual Income Tax, didn't kick in until the 1986 tax bill. And what's more, Reagan's 1981 rate cuts were phased in over three years. So for most...(Read Full Article)