Okay, time to set the record straight once and for all.<quoted text>
Reagan just raised taxes.
When most people hear the words,“tax hike”, they naturally assume you mean raising income taxes. But tax rates dropped dramatically across-the-board during Reagan’s tenure.
Not only did the top individual income tax rate go from 70 to 28 percent but the tax code was also indexed for inflation.
Tax increases are not created equal. Some are much worse than others. Many of Reagan’s so-called “tax increases” were actually examples of ending deductions.
One of the tax increases Reagan signed - the Highway Revenue Act of 1982 - was a temporary increase in the federal gas tax from 4 to 9 cents. Another was a cigarette tax - Consolidated Omnibus Budget Reconciliation Act of 1985. These are real tax increases but should not be confused with the income tax.
Criticism from free marketers on the right was his raising the capital gains tax rate as well as the corporate rate — Tax Reform Act of 1986. These were real tax increases and, in some cases,“regressive” taxation, but they pale in comparison to the scale of the income tax cuts that defined the Reagan era.
Congressional Democrats promised Reagan, "We’ll cut spending if you raise taxes.”
Reagan was offered such a deal in 1982. It’s the reason he reluctantly agreed to the largest tax increase of his presidency - the Tax Equity and Fiscal Responsibility Act of 1982.
The Democratic Congress then promptly proceeded to ignore the planned spending cuts.