Last Tuesday, The Center for Vision & Values at Grove City College hosted its eighth Ronald Reagan Lecture, a much-anticipated annual event. This year featured Art Laffer and Roger Robinson. Laffer is the namesake of the Laffer Curve, a cornerstone of President Reagan's supply-side economic policies. Robinson spearheaded the extraordinary economic-warfare campaign against the Soviet Union for Reagan's fearless National Security Council.
The discussion covered many issues, including how the policies pursued by Ronald Reagan to stimulate economic growth were so completely different from Barack Obama's. It's worth highlighting those differences here. We ignore them at our peril.
Reagan inherited an abysmal economy from Jimmy Carter. His prescription for recovery rested on four pillars: tax cuts, deregulation, reductions in the rate of growth of government spending and carefully managed growth of the money supply. He wanted to stimulate economic growth via tax cuts, allowing the American people to keep their money and invest it more wisely and efficiently than government.
This was, in effect, private-sector stimulus — a stark contrast to President Obama's massive $800 billion public-sector (read: government) “stimulus” in 2009. Among Reagan's tax cuts, the federal income tax reduction was the centerpiece. Reagan secured a 25 percent across-the-board reduction in tax rates over a three-year period beginning in October 1981. Eventually, the upper-income rate was dropped from 70 percent to 28 percent.
In the process, Reagan also dramatically simplified the tax code. When he was inaugurated, there were 16 separate tax brackets. When he was finished, there were only two. Not only did this simplification eliminate complexity, it also eliminated loopholes and removed 4 million working poor from the tax rolls; they no longer paid any federal income tax.
Reagan presided over the largest tax cut in American history and accomplished it in tandem with a huge Democratic Party majority in the House. It was a bipartisan triumph that The Washington Post called “one of the most remarkable demonstrations of presidential leadership in modern history.” Unlike President Obama, who derided his Republican congressional opposition as “hostage takers” and denounced their desire for tax cuts, Reagan found a way to work with the opposition to advance the country.
Dr. Paul Kengor is professor of political science at Grove City College, executive director of The Center for Vision & Values, and author of the book, “The Communist: Frank Marshall Davis, The Untold Story of Barack Obama’s Mentor.” His other books include "The Crusader: Ronald Reagan and the Fall of Communism" and "Dupes: How America’s Adversaries Have Manipulated Progressives for a Century."