The Reagan Tax Cuts

The Washington Times has an editorial looking back at the Reagan tax cuts. I think this was the key paragraph.

The across-the-board cuts were phased in over 1981 (5 percent), 1982 (10 percent) and 1983 (10 percent). When the final cut occurred in 1983, the U.S. economy embarked on one of its strongest expansions in history, growing at an annual compounded rate of 4.4 percent throughout the 1983-1989 period. Unemployment collapsed from 10.7 percent during the fourth quarter of 1982 to 5.4 percent during the fourth quarter of 1989. Contrary to the predictions of liberal economists, who insisted the tax cuts would be inflationary, inflation diminished from an annual average of 12.9 percent (1979-1980) to 1.1 percent in 1986 and to an average of 3.7 percent (1983-1989).

The fact that when Reagan took office the country was mired in both double digit unemployment and double digit inflation cannot be emphasized enough. I'm still amazed by people who argue that tax cuts don't work. They've worked for JFK, Reagan and now George W. Bush.