Hannity falsely claimed Reagan tax cuts "doubled revenues ... from $500 billion to over $1 trillion"

››› ››› ANDREW SEIFTER

On the September 15 edition of Fox News' Hannity & Colmes, co-host Sean Hannity falsely asserted that President Reagan's 1981 tax cuts "doubled revenues ... from $500 billion to over $1 trillion." In fact, when adjusted for inflation, revenue growth during Reagan's eight years in office was far more modest than Hannity proclaimed. Moreover, there is no consensus among economists on whether the 1981 tax cuts were the cause of revenue increases during the Reagan years.

According to the White House's Office of Management and Budget (OMB), when adjusted for inflation to constant fiscal year 2000 dollars, receipts (revenues) increased only from $1.077 trillion to $1.236 trillion during Reagan's term in office. Even in unadjusted (current) dollars, Hannity's claim that revenues "doubled" to more than $1 trillion during the Reagan administration is false: From 1981 to 1988, revenues in current dollars increased from $599.3 billion to $909.3 billion.

From OMB:

FISCAL YEAR

REVENUE IN CURRENT DOLLARS (billions)

REVENUE IN CONSTANT FY2000 DOLLARS (billions)

1981

599.3

1,077.4

1982

617.8

1,036.9

1983

600.6

961.7

1984

666.5

1,016.8

1985

734.1

1,082.6

1986

769.2

1,107.3

1987

854.4

1,196.1

1988

909.3

1,235.6

Further, evidence suggests that the Reagan tax cuts were not the cause of the revenue increases that did occur during the 1980s. As the Center on Budget and Policy Priorities (CBPP) has documented, citing figures from OMB, "Income tax receipts grew noticeably more slowly than usual in the 1980s, after the large cuts in individual and corporate income tax rates in 1981." By contrast, "income tax collections grew much more rapidly in the 1990s," when "marginal income tax rates at the top of the income spectrum were raised," CBPP noted.

From a September 15 Hannity & Colmes discussion of President Bush's speech on Hurricane Katrina relief efforts:

HANNITY: What I liked about what the president did tonight is, we're going to help, but we're going to help the right way -- a Gulf Opportunity Zone, Enterprise Zone, tax breaks. The private sector, the public sector joining together and doing the right thing. That is conservatism -- compassionate conservatism.

ALAN COLMES (co-host): But when you talk about tax breaks, though, how do you pay for it? He's got to address at some point how do we pay for these billions and billions of dollars? Do you do it with tax cuts?

HANNITY: Everybody -- well, tax breaks actually increase revenues to the government. Reagan doubled revenues by cutting taxes, from $500 billion to over a trillion, and he did it in eight years.

COLMES: Biggest deficits in history up until now with Reagan.

HANNITY: No. He doubled revenues to government. More money came in than ever before.

Posted In
Economy, Taxes
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