“Raiders of the Lost Ark” was hot at the box office that summer. It redefined the action/adventure genre of American film.
An archeology professor turned adventurer traveling the globe in search of artifacts, sporting a leather jacket, and packing a bull whip and a pistol, Indiana Jones entertained Americans with his sense of adventure at a time when their economic security was its worst since the Great Depression.
Riding out of the Hollywood sunset and into the nation’s capital that summer was newly-elected President Ronald Wilson Reagan, ready to redefine the American economy.
Sporting a penchant for the anecdote, a faith in free markets, and personal charm most in Congress found disarming, President Reagan persuaded many to vote for his tax cuts, although some said he never outwardly asked.
After months of lobbying and five months following an assassin’s attempt on his life, President Reagan headed for his beloved Rancho del Cielo where he signed the Economic Recovery Tax Act into law on August 13, 1981.
Fog draped the ranch, symbolizing the economic malaise the newly-elected president believed his policies would lift.
In his core beliefs, the president thought it immoral to take from some to give to others; immoral not because others needed it, but immoral, among other reasons, because it provided little, if any, incentive for higher production, thereby taking away the common man’s hope in the future.
In an attempt to convince one of his congressional doubters, the Great Communicator recounted his personal experience: how after he reached the 90 percent tax bracket with his film income he would shut it down due to lack of incentive.
“We weren’t the ones who were hurt,” recounted one congressional representative of President Reagan’s anecdote in a Washington Post story published the day the president signed the largest tax relief bill in U.S. history. “The people who worked the props and the people who worked in the yard, they were the ones who were hurt.”
President Reagan’s illustration convinced his skeptic, who felt the president’s tax policies would bring only bigger deficits, not prosperity.
Based on philosophy, Ronald Reagan’s economic ideas were clear, especially in the way he presented them. He gave personal examples, cited his reasons for what he believed, and moved on.
Willing to risk his popularity to see his faith in action, Ronald Reagan’s eloquence, aided by index cards, was put to the test.
Skeptics predicted the president’s tax policies would bring hardship on the states. A Chicago Tribune headline, in contrast to Ronald Reagan’s positive, polite rhetoric, read: “Willing or not, states are partners in Reagan tax gamble.”
Meanwhile, liberals in Congress waited like children on Christmas Eve, believing the president’s tax cuts meant sure victory in the next election.
President Reagan was able to convince congressional Republicans to stand with him.
All, except one: Vermont’s Jim Jeffords.
When the dust settled, the president persuaded nearly 50 congressional Democrats to vote for his plan as it passed the House, 238-195, and the sailed through the Senate, 89-11. Mostly from the South and the West, they became known as Reagan Democrats for often siding with the president on economic issues.
As Newsweek recounted how House Speaker Tip O’Neill likened the tax battle as but an inning in a baseball game of nine that would end with the 1982 election, U.S. News & World Report quoted a senator from Indiana, Dan Quayle, who predicted that Reagan’s historic tax cuts marked a second American Revolution.
Both then observed as it launched the longest economic boom in American history.