We need a Reagan tax revolt to counter today’s big-government spending
Forty years ago this month, Ronald Reagan signed the Economic Recovery Tax Act, a historic achievement of the national taxpayer revolt that found its conception in California in the early 1970s and ultimately demonstrated the powerful economic success of supply-side tax policy.
These pro-taxpayer reforms — also known as Kemp-Roth, for congressional champions Rep. Jack Kemp (R-N.Y.) and Sen. Bill Roth (R-Del.) — significantly cut the top income tax rates from 70 percent to 50 percent, reduced and indexed for inflation business and capital gains, and ushered in more than two decades of unprecedented economic prosperity.
These achievements were founded initially in the crucible of the California Tax Revolt, which then-Gov. Reagan led. He understood the power of tax cuts and the resultant unleashing of American capital and innovation. In the early ’70s, Reagan asked me to lead a group to devise a California government spending and tax reform measure, which eventually became Proposition 1 on the 1973 state ballot.
That citizen initiative was our first attempt at reining in government’s penchant for out-of-control spending and tax increases, and although this initiative fell short of passage, it touched a political undercurrent that sparked a much larger taxpayer movement, ultimately leading to the passage of Proposition 13 to limit property taxes and Proposition 4, the Gann Limit, which indexed government growth to population and inflation.
More importantly, these achievements had the profound impact of proving the truth of supply-side economics and the power that a national tax revolt can provide to a nation. Reagan instinctively understood, first as governor of California and then as president, the nature of government spending and its potentially ill effects on people.
I am often reminded of his quote on the dangerous essence of government spending: “No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we’ll ever see on this earth.”
Big-government advocates, he also once remarked, must be forced to curb their profligate ways. That was the precept under which we lived as we launched the tax revolt — and we should be reminded of now, as we ponder a modern-day correction to the reckless economic course that Joe Biden’s administration has set for America.
It’s no surprise that big-government tax-and-spenders once again have led our nation into high inflation and economic malaise with outrageous spending. Yet, Reagan’s work charted a course to follow that would steer clear of the rocky shoals into which the left is determined to lead us.
On Aug. 13, we celebrated the undeniable economic prosperity evidenced by Reagan’s signing of the Economic Recovery Tax Act. This anniversary ironically came in the same month that Senate Democrats were moving us in the opposite economic direction with a $1 trillion infrastructure bill and $3.5 trillion budget.
Thankfully, one of the most important legacies of the Reagan tax reform effort were follow-up state pro-growth policies, which are alive and well in many places. We continue the tax reform work in state capitals and major economic centers across the country through a network of organizations known as the State Policy Network.
“Simple fairness dictates that government must not raise taxes on families struggling to pay their bills,” Reagan said on many occasions. “You can’t be for big government, big taxes and big bureaucracy and still be for the little guy.”
These are words that Democrats would be wise to pay attention to. The supply-side movement he championed 40-some years ago is still right for our nation today — and some would argue, even more urgent.
Lewis K. Uhler is founder and chairman of the National Tax Limitation Committee and National Tax Limitation Foundation. He was a contemporary and collaborator with Ronald Reagan and economist Milton Friedman in California and across the country.