The conservative myth that President Reagan was this great anti-tax Republican who only cut taxes during his presidency just refuses to die. In fact, Reagan "raised taxes so much on so many people" in peacetime that Paul Krugman has dubbed him "the great taxer." But on his Fox Business show, David Asman was unable to acknowledge the fact that Reagan raised taxes, going so far as to wrongly correct a guest who noted that Reagan increased them a year after taking office:
In fact Reagan did more than just "change the tax code" in 1986. It's true that Reagan "signed into law one of the largest tax cuts in the postwar period," but he also "ended up signing off on several measures intended to raise more revenue." According to CNNMoney:
Soon after taking office in 1981, Reagan signed into law one of the largest tax cuts in the postwar period.
Despite the aggressive tax cutting, Reagan couldn't ignore the budget deficit, which was burgeoning.
After Reagan's first year in office, the annual deficit was 2.6% of gross domestic product. But it hit a high of 6% in 1983, stayed in the 5% range for the next three years, and fell to 3.1% by 1988. (By comparison, this year it's projected to be 9% but is expected to drop considerably thereafter.)
So, despite his public opposition to higher taxes, Reagan ended up signing off on several measures intended to raise more revenue.
"Reagan was certainly a tax cutter legislatively, emotionally and ideologically. But for a variety of political reasons, it was hard for him to ignore the cost of his tax cuts," said tax historian Joseph Thorndike.
Two bills passed in 1982 and 1984 together "constituted the biggest tax increase ever enacted during peacetime," Thorndike said.
Likewise, Reagan senior policy analyst Bruce Bartlett has noted:
Reagan signed into law the Tax Equity and Fiscal Responsibility Act in 1982 before the recession was even over and went on to sign 10 more major tax increases during his administration. By 1988 he had taken back half the 1981 tax cut. These tax increases were most enacted as part of budget deals that cut domestic discretionary spending. Compared to today's Republicans, Reagan was a model of fiscal responsibility.
To illustrate his point, Bartlett included this chart showing that, as of 1988, Reagan had raised taxes 11 times in all, totaling more than $130 billion:
And last week, Politico noted that not only did Reagan increase taxes, at the same time, he also created revenue to build more roads and stabilize Social Security.