After the American Century
The Republican position on taxes is essentially that their hero Ronald Reagan was wrong. President Obama wants to go back to a tax code much like that which became law under President Reagan. It reduced taxes but it also closed some loopholes and it made American corporations pay more than they had been.
Look at the maximum tax rate for today and for 1986, when Reagan had been president for six years.
In 1986 the Federal tax rate for a husband and wife, filing together, was 50% on income over $358,782.
In 1986 the Federal tax rate for a husband and wife, filing together, was 50% on income over $358,782.
In 2011 the Federal tax rate for a husband and wife, filing together, was 35% on income over $379,150.
Of course the US tax code is complex, and many deductions can come into play, but let us focus on the basic fact. The highest rate in 1986 was 50%, but a quarter century later it is only 35%. Under President Clinton the highest rate was 39.6%. The rich have seldom had it so good, and the economy has seldom been so bad.
A tax plan that is far less demanding than that passed by President Reagan is now being attacked by the Republicans as "class warfare" - which shows how ridiculous public debate in the US has become, Warren Buffet and other billionaires are willing to pay more taxes, because they see that it is not just or fair or economically sustainable for them to pay as little as they now do.
The Bush tax cuts during his first term were not responsible fiscal policy. They encouraged a housing bubble and they made it impossible for the US government to pay its bills. They created the current financial mess, and the tax laws they passed need to be revised.
Obama should promoting his plan as a return to Reagonomics.
