The Truth About Reaganomics!
AKA: The trickle down theory!
AKA: The trickle up theory!
     Ah yes, Ronald Reagan the champion of the Republicans. People are still saying to this day what a great president he was. Let's see, where should I start. There are so many exaggerated and untrue claims made about the man, I  hardly know where to start. In general Reagan was basically a Robin Hood in reverse. The man took from the poor and middle class and gave to the rich and corporations. For the sake of this article, I refer to the poor as families making less than $10,000.00 a year and the middle class as $10,000.01 up to about $50,000.00 a year. These are general figures and it depends on how big the family is and what geographic location we are talking about.
     Right off the bat, after Reagan was elected president he pushed through the biggest tax cut in history. Looking very closely at just who paid less and who paid more is quite interesting. Yes, I did say," who paid more". It is estimated that corporations and individuals making over $200,000.00 a year, paid three trillion dollars less in taxes the 9 years following the tax cut than they would have paid if the tax cut had not been implemented. ( George Bush finally saw the light, or should I say the red ink and partially rectified the situation with a tax hike. Remember the "Read my lips, no more new taxes", Bush said, just before the election.) Lets see if we can figure out what happened to the three trillion dollars. Did it trickle up or down? Have you ever played, Follow Three Trillion Dollars?........Families earning $199,999.99 down to about $75,000.00 a year faired about the same after Reagan's tax changes were enacted as they would have had the tax code been left alone. Looking closer though, the families earning on the high end say $100,000.00 to $199.999.99 a year faired much better than  families earning $75,000.00 a year. Families earning under $75,000.00 a year generally paid more in taxes than they did before Reagan's tax cut.  Reagan in all his wisdom knew people would see right through his ploy, or should I say more people would see through his ploy if he hiked the tax rates on families earning under $75,000.00 a year at the same time he was giving huge tax cuts to the corporations and high income families. What happened is, the tax deduction for interest paid on credit cards  was eliminated, income tax on unemployment was implemented, 2% floors were added to casualty losses and employee expenses, medical care expenses got a 7.5% floor and numerous other tax changes were implemented. These changes were targeted right at Middle America, "Yes people, you and me." These changes hiked the tax bill for millions of families in the lower and middle income brackets. A few of the higher income people that may have drawn unemployment or paid more because of one of these changes, were reaping the benefits of a lower tax rate. For high income people the lower tax rate in most cases more than offset the higher taxes paid due to the other changes mentioned. Reagan was so slick a lot of people bought right into the scheme. Remember Reagan's state of the union address about how we needed to tighten our belts to get this country on track, or something like that, and the, "One more for the Old Gipper", remark. My belt was already so tight it was cutting me in two.
     How could Reagan have done such a sweep without support?  He had support, his big claim was the reduced taxes would cause businesses to hire a bunch of people and these people would pay so much in income tax that it would offset the big tax cut. People listen to me, from an economic standpoint this is mathematically impossible. The reality is, very few  jobs were created in the U.S. that were directly attributable to the tax cut. The 3 trillion dollars in tax breaks mostly went into foreign investments. The rest went into the pockets of CEO's of big corporations,  high ranking management personnel of big corporations and to families making more than $200,000.00 a year. Virtually NONE of the money trickled down. The money trickled up, just like I said, "The trickle up theory."
     One of the more ridiculous claims I recently heard about Reagan was:  "He brought down the Berlin Wall and caused the fall of communism. "
     REALITY CHECK - This is TOTALLY FALSE - Reagan had nothing to do with the fall of communism, it would have fallen sooner or later on it's own. It is doubtful Reagan had any effect what so ever on communism. The beginning of the fall of communism happened way before Reagan was president. He was probably kissing Jane Wyman when the fall of communism started.
     One of the whoppers I heard lately was:  "Reagan set-up the economy so good when he was in office, we are now starting to reap the benefits, the budget deficit almost disappearing is because of Reagan."
     REALITY CHECK - This is TOTALLY FALSE - Reagan pushed the tax rates so low no matter how good the economy was doing and how little congress spent the revenue would have most likely NEVER caught up with spending. Remember the mathematically impossible remark earlier, here it is again, the economy would have needed to grow at something like 20% a year every year to reduce the deficit to zero by the year 2000, that is impossible. The reason the deficit has been reduced so much lately is because of several factors. The Bush tax hike was a start, inflation has been low partly because money is in short supply and interest rates have been lower saving the government money on interest payments. Additional tax changes have increased revenue and the economy has been going strong. NONE of this had the slightest thing to do with Reagan. The fact is, Reagan screwed up the economy so bad with his tax cut, if George Bush hadn't gone back on his campaign promise and raised taxes we would probably be facing budget deficits for many years to come. We should all thank George Bush for that one.
     Check out this link for more information:  "The Reagan Years"
               Thanks everyone!!!!

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