The Reagan Tax Cuts and Foreign Policy
During the 1980's President Ronald Reagan's (our 40th president from
1981 to 1989) domestic policy of a substantial tax cut led to greatly increased economic prosperity for our country. During Reagan's administration marked changes were made to the tax code and economic statistics showed a major change for the better. However, at the same time, the Democrats controlled the Congress and continued increased spending against Reagan's wishes. The Joint Economic
Committee stated that an across-the-board tax cut was not new. In the 20's the
Mellon tax cuts were implemented by Secretary of Treasury Andrew Mellon during the Administrations of Hoover, Harding, and Coolidge. In the 60's Kennedy introduced tax cuts. In both instances the decrease of high marginal tax rates somehow increased tax payments by the rich. Perhaps a foreshadow of things to come. Debates were raging over the Reagan tax cuts, known as the Economic
Recovery Tax Act of 1981 (or, ERTA). This act was designed to spur savings, investment, work, and economic efficiency. This policy would impose a 25% across-the-board cut in personal marginal tax rates. In the act of decreasing marginal tax rates, and stimulating economic incentives, ERTA would increase the flow of resources into production, thus lifting economic growth. This policy received much criticism because its opponents argued that ERTA would be a giveaway to the rich, because their tax payments would collapse. Reagan worked hard and skillfully with the congress to obtain legislation to stimulate economic growth and curb inflation, he embarked upon a course to cut taxes and curb inflation. President Reagan was able to sign into law a tax cut in late
1981 even though congressional Democrats tried to block his cuts. All tax payers received these cuts which helped to spur the economy. The cuts were taken over three years with a 5% cut in 1981, a 10% cut for 1982, and in 1983 another 10% cut. Reagan's call for extensive changes in the federal income tax laws helped bring about passage of the Tax Reform Act of 1986. In 1986 Reagan introduced the
Tax Reform act of 1986. The tax reform act of 1986 chopped taxes, and indexed taxes for inflation as well. During Reagan's first term the inflation rate was at -5.7%, unemployment was at1.4%, interest rates were at -.7, and the gross na... ... middle of paper ...
... The aides had then illegally given some of the arms money to contra guerrillas.
Conclusion
The Reagan Tax cuts showed that reducing excessive tax rates stimulates growth, reduces tax avoidance, and can increase the share of tax payments given by the rich. With respect to foreign policy Reagan's performances especially with Mikhail Gorbachev showed a high approval of performance with the people.
Reagan had the highest poll ratings for performance of any president since World
War 2. It appears that his leadership helped to make the feeling of the country to have a more confident outlook on the future.
References
"Iran-Contra Affair," Microsoft® Encarta® 96 Encyclopedia 1993-1995. 1996
Grolier Interactive Inc.
Edition copyright © 1992 by Houghton Mifflin Company.
http://www.house.gov/joe/welcome.html
http://www.reaganhome.com/taxcuts.html
http://www.theatlantic.com/atlantic/election/connections/foreign/reagrus.htm
Hyland, W.G., ed., The Reagan Foreign Policy (1987).
The American Heritage® Dictionary of the English Language, Third
The Atlantic Monthly, February 1994; Reagan and the Russians; Volume 273.
The Joint Economic Committee reports on the Reagan Tax Cuts
Ronald Read ran a campaign based on lowering taxes, and strong national defense. In his first inaugural address, he emphasized the important to conserving the power of an us control our own destinies. He also says that government is not a solution to the problem that they are the problem. During his term, he decreases the size of federal government and supported policies and reforms that he believed empowered individuals. Reagan also worked to reduce federal spending on home programs, due to his concerns about the constitutionality of those programs. He called for finances cuts, mostly from great Society programs. while not touching Medicare and Social security, Reagan authorized cuts in federal schooling programs, food stamp programs, workplace programs, and other non-military domestic programs. Believing the U.S. had left out the military after the Vietnam war, and because the cold battle continued, Reagan asked for increased funds to reinforce the military. The decrease in taxes and growth in army spending ended in the biggest budget deficits in the united states’ records to that time. The deficits persisted each year, however Reagan vowed to veto any tax increases Congress
defeat the British in the war, but he did more than that. That is what
Leading up to the year 1981, America had fallen into a period of “stagflation”, a portmanteau for ‘stagnant economy’ and ‘high inflation’. Characterized by high taxes, high unemployment, high interest rates, and low national spirit, America needed to look to something other than Keynesian economics to pull itself out of this low. During the election of 1980, Ronald Reagan’s campaign focused on a new stream of economic policy. His objective was to turn the economy into “a healthy, vigorous, growing economy [which would provide] equal opportunities for all Americans, with no barriers born of bigotry or discrimination.” Reagan’s policy, later known as ‘Reaganomics’, entailed a four-point plan which cut taxes, reduced government spending, created anti-inflationary policy, and deregulated certain products. Though ‘Reaganomics’ was successful both at controlling “stagflation” and promoting economic growth, it has and always will be an extremely controversial topic regarding the redistribution of wealth.
One of the most important aspects of Reagan’s time in office was his domestic policy. He knew to have a successful presidency and create a strong, the people of the United States needed to be cared for. His first goal was to turn the economy around from the stagflation it encounter in the Carter era. Stagflation is very similar to inflation. The main difference is that inflation is the result of a quick economic growth while causes the value of money to decrease with now economic growth. To accomplish the turn around, Reagan introduce his economic policy which became known as Reaganomics. Reaganomics was based in supply side economics. This economic theory says that lowering taxes through tax cuts increases revenue by allowing more money
For the past century, the United States has been regarded as the greatest hegemonic power in the world. The U.S. played the most important role in the advancement of mankind from social, political, scientific, military, and economic standpoint. Unfortunately, today this is no longer true. Since the 1980’s the U.S. has been on a gradual decline. The introduction and implementation of trickle down economics, otherwise known as “Reaganomics,” has contributed greatly to the systemic dismantling of the socioeconomic structure that made America great.
his own defeat, he was a brave and good leader, and had more than his
It resulted him winning the presidential election through default was easy for him. No one within the country dared to run against him, due to his dictatorship leadership while he oversaw the Army. In turn he was elected president in
From the day that Ronald Reagan was elected President of the United States, in November 1980, he had a huge task ahead of him, to develop an economic plan or policy to implement into the national economy. President Reagan felt that he needed to base his economic program on the basis of supply side economics (Encyclopedia Britannica, Britannica.com, 2000). This theory is a very complex idea that President Reagan developed himself, so many people gave it the name of Reaganomics (Encyclopedia American, gi.grolier.com , 2000). The theory of Reaganomics called for a significant reduction in all forms of taxes and an adequate cutback on governmental spending so there will be more money in the hands of the American citizens. The main goal of the supply s...
up being very influential, which is probably why he was so popular. His popularity pushed him to the top where later he became the general that most people know him as today. But he did not become this big as quickly as people might think. In fact, it was quite the process that he went...
- In the 1990's conservatism strife to reduce the size of government, reduce public spending, reform the taxation laws to encourage investments, deregulate business to promote economic growth, and manage the fiscal and monetary sides of the economy
I disagree with what has been supposed thus far. While it is true that American politics had turned more to the left by 2008, so the economy also turned south and the wars raged on in the Middle East. Ronald Reagan had very precise and comprehensive economic and foreign policies that may have gone over particularly well as the economy was tanking and we were mired in Iran and Afghanistan. President Obama, on the other hand, had very generalized policies on both issues, which could have caused Reagan to appear as the more knowledgeable of the two candidates.
He was born into a happy, well-disciplined family, and had a very happy childhood. Before Reagan held office, Reagan was a radio announcer, and became the voice of Major League Baseball in 1932. Reagan also had a 7-year contract with Warner Brothers, and made about fifty movies. Reagan then put all the fun and games aside, and joined the Army Reserve and was called to active duty shortly after Pearl Harbor. He was in the Army from 1942-45, rising to the level of Captain.
improve the health or lives of his fellow citizens. The main reason he took such a strong
...large step towards world peace, thus this is way I believe he was an effective visionary leader.
Something that may come to everyone’s mind now days and the number one thing that is looked at after a presidential election and every New Year is stock. Stocks determine the health of the economy, the money people are willing to invest, take risks on and win back or lose, but because of the crash, it discouraged people from investing in stocks and instead a huge amount of withdrawals happened leading to the economic collapse that occurred. The U.S government began to worry it would run out of gold because everyone began to turn the couple dollars they still had into gold so the Federal Reserve decided to increase the value of the dollar. Banks began to fail and lose savings; people had to withdrawal the money they had left, leaving banks no other choice but to shut down.