Home for the holidays after passing the eighth-largest tax cut in United States history, Republicans could be forgiven for reveling in the warm embrace of nostalgia.
Who among them won’t raise a glass to Ronald Reagan, a welcome ghost of administrations past, the revered Republican president whose first State of the Union address promised the biggest tax cut ever to “expand our national prosperity, enlarge national incomes and increase opportunities for all Americans”?
Speaker Paul D. Ryan might chuckle fondly at Reagan’s tale of woe from a worker in the Midwest — a precursor to Mr. Ryan’s “Cindy”— who made the everyman’s case for a tax cut by complaining, “I’m bringing home more dollars than I ever believed I could possibly earn, but I seem to be getting worse off.”
For all the backslapping over a job well done, however, Republicans are proving notably more reluctant to acknowledge the true impact of the tax changes that Reagan wrought.
That’s because Reagan’s cuts didn’t quite work as advertised.
Gross domestic product grew quickly during his two terms, averaging about 3.5 percent a year, pretty decent compared with the current measly pace. For one in two Americans, though — those in the bottom half of the income pile — income actually shrank on Reagan’s watch. In 1980, the year he was elected, they earned $16,371 a year on average, in today’s dollars, according to the World Wealth and Income Database. By 1988, Reagan’s last year in office, they had to make do with $16,268.
– New York Times