Depression-born super RINO Alan Simpson misuses Ronald Reagan to advise Hoover-like tax hikes on top income earners and job providers to cut deficit.
It's time to clear up the confusion and angst caused by Alan Simpson on Ronald Reagan's tax hikes, which Obama and the left are using with glee to bash, trash and belittle John Boehner and Republicans on the debt ceiling conflict. Simpson, who co-chaired Obama's laughably unserious Debt and Deficit Commission (a failed political ploy for the 2010 election) rightly said that there were seven (some say 11) Reagan tax hikes during the Gipper's two term presidency. "Reagan," said Simpson, "was a realist when it came to taxes;" and that while, on the one hand, he enacted a massive tax cut at the start of his presidency, on the other, when taxes needed to be raised for revenue Reagan put aside his supply-side ideology and did the right thing. This was the "real Ronald Reagan," claims Simpson. The forgotten, practical, down to earth Reagan; the great compromiser who today's Republicans do well to study and follow in their conflict with Obama and his party over deficits, debt and taxes. But what Simpson said was only a half truth.
But before I explain this a word about Simpson: former US Repubican Senator and majority whip Alan Koos Simpson from Wyoming was born September 2, 1931 during the distastrous administration of Republican Herbert Hoover. In fact he was born exactly 2 years, 5 months and 29 days into Hoover's presidency. This translates into 912 days oddly, strangely and perhaps significantly one day short of Obama's 913th day in office. This was last Friday July 22nd, the day of the great debt talk collapse between Obama and John Boehner where Obama demanded $400 billion in class warfare tax hikes, an utterly astonishing "coincidence*." Hoover, the progressive, Teddy Roosevelt, big government liberal-the man Woodrow Wilson (backed by FDR) wanted as his successor-called for massive tax hikes in 1931 (the year of Simpson's birth) to raise enough revenues to pay for his stimulus programs (public works, loans (bailouts) to distressed banks and businesses, etc.). Hoover's runaway spending blew a hole in the budget turning an $800 million surplus inherited from Coolidge into a multi-billion dollar deficit by the time he left office. The tax increase, the largest ever in US history (more than doubling the rate on the rich from 25% to 63%) was enacted into law in June 1932 with catastrophic consequences to the economy and deficit. Not only did government revenues dramatically decline but unemployment shot through the roof rising from 15.8% in 1931 to 23.5% in 1932, then topping off at 25% in 1933 (the year of Hoover's last budget). This, I believe, is an unmistakable and ominous warning that Alan Simpson is greatly mistaken and should be ignored when he advises that Republicans compromise with Dems on tax hikes. Hoover massively raised taxes on a depressed economy and made it far, far worst not even getting the revenues that were projected.
*March 4, 1928 (Hoover's inaugural) to September 2, 1931 (Simpson's birth)=912 days.
January 20, 2009 (Obama's inaugural) to July 22, 20011 (breakdown on debt talks)=913 days.
Obama and Simpson talking about forcing the rich to pay patriotic taxes.
Now as for Reagan's tax hikes these are the facts:
When Reagan left office in 1989 the top marginal tax rate was 28%, down from 70% when he began his presidency. Reagan's tax increases in between were not big enough to negate the stimulative effect of his massive tax cut. In fact, Simpson says that these taxes cannibalized roughly one third of Reagan's cut shrinking a 32 point spread to a little over 20 points. In other words, top earners were left with a tax cut equaling the Kennedy-Johnson cut of 1965* which sent the economy soaring and revenues flowing as did Reagan's in the 1980s. That's the part Simpson leaves out.
*Kennedy-Johnson lowered the top marginal rate from 90% to 70%.
Indeed, without the jolt of Reagan's huge supply side cut the economy would not have recovered remaining in a deep malaise that started during the Ford years and was worsened by the incompetent Carter. In fact, if Reagan had raised taxes without the supply side cut it could have plunged the economy into a depression-as would likely happen today if Republicans follow the Depression-born Simpson's advice.
READ MY FIST, NO NEW TAXES!
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