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What Reagan Actually Said

Advance Copy of Editorial from the April 23, 2012, issue.

12:00 AM, Apr 13, 2012 • By WILLIAM KRISTOL
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I’m not the first president to call for this idea that everybody has got to do their fair share. Some years ago, one of my predecessors traveled across the country pushing for the same concept. He gave a speech where he talked about a letter he had received from a wealthy executive who paid lower tax rates than his secretary, and wanted to come to Washington and tell  Congress why that was wrong. So this president gave another  speech where he said it was “crazy”—that’s a quote—that certain tax loopholes make it possible for multimillionaires to pay nothing, while a bus driver was paying 10 percent of his salary.  That wild-eyed, socialist, tax-hiking class warrior was Ronald Reagan.

He thought that, in America, the wealthiest should pay their fair share, and he said so. I know that position might disqualify him from the Republican primaries these days, but what Ronald Reagan was calling for then is the same thing that we’re calling for now: a return to basic fairness and responsibility; everybody doing their part. And if it will help convince folks in Congress to make the right choice, we could call it the Reagan Rule instead of the Buffett Rule.
—President Obama, April 11, 2012

Barack Obama’s appeal to Ronald Reagan is illuminating in a number of ways. It’s illuminating that today’s liberals need to appeal to the example of Reagan to sell their policies. That’s a posthumous victory for Reagan, and an important contemporary victory for Reaganism. Even more, it’s illuminating because it gives us reason to go back and read the Reagan speeches Obama cited, and see how compelling they were and how thoroughly the president misrepresented them.

Did Reagan, as Obama claimed, “travel across the country pushing for the same concept” as Obama today? No. Reagan was pushing for comprehensive tax reform, at the center of which was an across-the-board tax rate reduction combined with elimination of tax shelters. The idea was to simplify the system, out of respect for citizens and for the health of the economy. Obama, by contrast, has never risked offering a serious big tax reform proposal. What he does want to do is to raise marginal tax rates on many American families.

Obama cited two Reagan speeches from June 1985. Just before that, on May 28, 1985, Reagan had addressed the nation from the Oval Office, kicking off the effort that would produce the Tax Reform Act of 1986. The heart of his argument: “By lowering everyone’s tax rates all the way up the income scale, each of us will have a greater incentive to climb higher, to excel, to help America grow.” 

Reagan followed up on June 6, speaking at Northside High School in Atlanta. He did note “the unproductive tax loopholes that have allowed some of the truly wealthy to avoid paying their fair share” and that “sometimes made it possible for millionaires to pay nothing, while a bus driver was paying 10 percent of his salary.” He called them “crazy.” That’s the part of his predecessor’s speech Obama chose to recall.

Here’s what else Reagan had to say: He ascribed the economic comeback of the previous few years, in which “hope has returned, and America’s working again,” to the fact that we “cut tax rates and trimmed federal spending.”

Why didn’t President Obama quote that? What about Reagan’s explanation for why his administration had cut rates?

“What’s really important is what inspired us to do these things. What’s really important is the philosophy that guided us. The whole thing could be boiled down to a few words—freedom, freedom, and more freedom. It’s a philosophy that isn’t limited to guiding government policy. It’s a philosophy you can live by; in fact, I hope you do.”

Somehow, Obama neglected to quote that.

Reagan went on to defend his tax plan: “We want the part of your check that shows federal withholding to have fewer digits on it. And we want the part that shows your salary to have more digits on it. We’re trying to take less money from you and less from your parents.” Reagan noted that some people would save the additional money, some would spend it, some would invest it—but all were fine. Because “whatever you do with it, you’ll be the one who’s doing the doing. You’ll make the decisions. You’ll have the autonomy. And that’s what freedom is.”

Obama didn’t quote that either.

The second Reagan speech Obama referred to was given on June 28, 1985, in Chicago Heights, Illinois. There Reagan reiterated his call to “bring tax rates down for the vast majority of Americans.” Reagan emphasized that “America’s longsuffering families will get dramatic tax relief.” And he said,

This is a tax plan for a growing, dynamic America. Lower, flatter tax rates will give Americans more confidence in the future. It’ll mean if you work overtime or get a raise or a promotion or if you have a small business and are able to turn a profit, more of that extra income will end up where it belongs—in your wallets, not in Uncle Sam’s pockets. With lower personal and corporate rates and another capital gains tax cut, small and entrepreneurial businesses will take off. Americans will have an open field to test their dreams and challenge their imaginations, and the next decade will become known as the age of opportunity.

Obama didn’t quote that.

And Reagan summed up: “Our tax proposal is the opposite of trickle down; it’s bubble up.”

Obama didn’t quote that.

Needless to say, reading the speeches reminds us of the huge gulf between the worldviews of our 40th and 44th presidents. The difference goes beyond an analytical disagreement about how big government should be, or what tax rates produce faster economic growth. For Reagan, America at its best is citizen-centered and “bubble up.” For Obama, America is government-centered and top-down. This is in a way the core difference between these two presidents, and between our two political parties today.

Barack Obama has established the legitimacy and precedent of appealing to Ronald Reagan. It's a gift to Mitt Romney! Now Romney just has to walk through the door Obama’s opened, reclaim Reagan by elaborating on his vision and updating his policies, make the case against the nanny state and for freedom and a “bubble up” society—and win.

—William Kristol

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