Because a minor comments box riot broke out over the weekend, I've spent more time than any sane human would staring at government receipts numbers. Several charges were made in re: the Reagan era tax cuts (specifically ERTA, passed in 1981 and effective with the 1982 fiscal budget, although Reagan also oversaw another major tax restructuring, TRA, in 1986) with regard to the effect on tax revenues, budget deficits, and total debt:
Claim: Tax revenue decreased after ERTA and did not reach 1980 levels again until 1994.
Evidence: I have looked at every variant of revenue I can find, and I see no indication that this is true. I can't even divine where such a claim could have originated. It's not true for total receipts, on-budget receipts, individual or corporate income tax receipts....if the person who made this claim could clarify the source I'll look further, otherwise this one's tagged false. Total receipts did fall from the 1981 FY maximum of $1.077 trillion (constant 2000 dollars) to $1.037 tn in FY 1982 and were lower yet ($0.962 tn) in FY 1983. Thereafter, however, they began rising again, and exceeded the FY 1981 level in 1985, when the government collected $1.083 tn. Moreover, while the major effects of ERTA should have been reflected in individual income tax receipts, there was never a decline in that series (although there was a decline in corporate income tax receipts in 1982 and 1983).
Claim: The national debt quadrupled under Reagan.
Evidence: I can't get this figure out of the historical data, even if I measure gross debt in current dollars. Using FY 1981 as the base year (this is the last budget prepared by the Carter administration) gross debt during Reagan's two terms increased by 161% in current dollars but just barely doubled, increasing by 102%, in constant dollars.
Claim: Reagan's tax cuts caused the deficit, and the national debt, to soar. This refutes the claims of the supply siders, who swore that the tax cuts would "pay for themselves."
Evidence: The deficit, and consequently the national debt, did increase substantially under Reagan. But to blame this on tax cuts is rather like saying that if my husband gets a $5000 bonus and I go out and buy $10000 worth of furniture the next day, that our budgetary shortfall the next month was caused by his employer. The one did follow the other, certainly. It may even be the case that the windfall motivated me to go furniture shopping, and things just got out of hand. But it would be stupid to suggest that everything would be far better next year if his boss just didn't give him a bonus. It would be better still if he got the bonus, but his wife restrained her impulses. And I think that pretty much sums up Reagan and the Democratically controlled Congress with which he was saddled. It's true that Reagan didn't spend any political capital trying to rein in spending. He thought it more important to increase defense spending and end the Cold War once and for all. In hindsight, he was right. To continue my lame analogy, it's like I didn't run a $5000 deficit buying furniture, but hiring an exterminator to get rid of the termites that are eating the joists.
All the numbers I have used are available as tables in Bush's last budget. Or if you prefer to do your own spreadsheets, zipped Excel files are available from the GPO website.