Ronald Reagan

====Taxation====
{{Missing information|section|analysis|date=November 2023}}
[[File:President Ronald Reagan addresses the nation from the Oval Office on tax reduction legislation.jpg|thumb|left|alt=Reagan addressing the nation from the Oval Office on tax reduction legislation, 1981|Reagan outlining his plan for tax cuts, 1981]]

Reagan worked with the [[boll weevil Democrats]] to pass tax and budget legislation in a Congress led by [[Tip O'Neill]], a liberal who strongly criticized Reaganomics.{{sfnm|1a1=Cannon|1y=2001|1p=100|2a1=Pemberton|2y=1998|2pp=99–102}}{{efn|Despite their various disagreements, Reagan and O'Neill developed a friendship across party lines. O'Neill told Reagan that Republican opponents were friends "after six o'clock". Reagan would sometimes call O'Neill at any time and ask if it was after six o'clock to which O'Neill would invariably respond, "Absolutely, Mr. President".{{sfn|Cannon|2001|pp=100, 102}}}} He lifted federal oil and gasoline price controls on January 28, 1981,{{sfn|Graetz|2012|p=34}} and in August, he signed the [[Economic Recovery Tax Act of 1981]]{{sfn|Pemberton|1998|p=103}} to dramatically lower federal [[income tax in the United States|income tax rates]] and require exemptions and brackets to be indexed for inflation starting in 1985.{{sfn|Steuerle|1992|p=42}} Amid growing concerns about [[National debt of the United States|the mounting federal debt]], Reagan signed the [[Tax Equity and Fiscal Responsibility Act of 1982]],{{sfn|Pemberton|1998|pp=127–128}} one of the eleven times Reagan raised taxes.{{sfn|Bartlett|2012|p=44}} The bill doubled [[Cigarette taxes in the United States|the federal cigarette tax]], rescinded a portion of the corporate tax cuts from the 1981 tax bill,{{sfn|Rossinow|2015|p=62}} and according to [[Paul Krugman]], "a third of the 1981 cut" overall.<ref>{{cite web |url=https://www.nytimes.com/2004/06/08/opinion/the-great-taxer.html |url-access=subscription |title=The Great Taxer |last=Krugman |first=Paul |author-link=Paul Krugman |date=June 8, 2004 |website=[[The New York Times]] |access-date=August 30, 2011 |archive-url=https://web.archive.org/web/20221220114428/https://www.nytimes.com/2004/06/08/opinion/the-great-taxer.html |archive-date=December 20, 2022}}</ref> Many of his supporters condemned the bill, but Reagan defended his preservation of cuts on individual income tax rates.{{sfn|Pemberton|1998|p=128}} By 1983, the amount of federal tax had fallen for all or most taxpayers, but most strongly affected the wealthy.{{sfn|Rossinow|2015|p=63}}

The [[Tax Reform Act of 1986]] reduced the number of tax brackets and top tax rate, and almost doubled [[personal exemption]]s.{{sfn|Pemberton|1998||p=145}}

To Reagan, [[Reagan tax cuts|the tax cuts]] would not have increased the deficit as long as there was enough economic growth and spending cuts. His policies proposed that economic growth would occur when the tax cuts spur investments, which would result in more spending, consumption, and ergo tax revenue. This theoretical relationship has been illustrated by some with the controversial [[Laffer curve]].{{sfnm|1a1=Pemberton|1y=1998|1p=96|2a1=Woodard|2y=2012|2p=119}} Critics labeled this "[[trickle-down economics]]", the belief that tax policies that benefit the wealthy will spread to the poor.{{sfn|Cannon|2000|p=222}} [[Milton Friedman]] and [[Robert Mundell]] argued that these policies invigorated America's economy and contributed to the [[1990s United States boom|economic boom of the 1990s]].<ref>{{cite web |url=https://www.bloomberg.com/news/articles/2004-06-20/reagans-economic-legacy |url-access=subscription |title=Reagan's Economic Legacy |date=June 21, 2004 |website=[[Bloomberg Businessweek]] |access-date=December 30, 2022 |archive-url=https://web.archive.org/web/20120626061110/http://www.businessweek.com/magazine/content/04_25/b3888032_mz011.htm |archive-date=June 26, 2012}}</ref>
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