Reagan lowered the Capital Gains Tax that encouraged fruitful investment. This was a major key in the turn around of the economy. Reagan's policy demonstrated the basic truth behind the Laffer Curve. Sadly, Reagan was not able to convince Tip O'Neill to lower taxes. Along the way, Reagan sent the Soviet Union on its course to the ash heap of history. Of course, he only won 49 states in his re-election bid because he was too much of a gentleman to contest Minnesota.