Taxes and GNP

First the Reagan Administration gave us a water-treading adjustment of the income-tax brackets and called it a “25 per cent tax cut.” But really the OMB, the Treasury, and the Federal Reserve knew better, as did one or two well-known metropolitan dailies, which have maintained a discreet silence on the topic. Bracket creep and Social Security tax increases had sunk us deeper into the sea of income taxes than the Administration’s water-treading had buoyed us up. But everyone kept quiet.

On top of this illusory income-tax cut, Reagan decided to bash all the gallantly swimming taxpayers over the head with a real tax increase. At the same time, Reagan showed how weak he thought his hand was, explaining that he had thereby “saved” the third year of the “tax cut.” The tax-devouring Moloch had to be appeased one way or the other, apparently.

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Tom Bethell

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First the Reagan Administration gave us a water-treading adjustment of the income-tax brackets and called it a “25 per cent tax cut.” But really the OMB, the Treasury, and the Federal Reserve knew better, as did one or two well-known metropolitan dailies, which have maintained a discreet silence on the topic. Bracket creep and Social Security tax increases had sunk us deeper into the sea of income taxes than the Administration’s water-treading had buoyed us up. But everyone kept quiet.

On top of this illusory income-tax cut, Reagan decided to bash all the gallantly swimming taxpayers over the head with a real tax increase. At the same time, Reagan showed how weak he thought his hand was, explaining that he had thereby “saved” the third year of the “tax cut.” The tax-devouring Moloch had to be appeased one way or the other, apparently.