Tuesday, April 15, 2008

On Tax Day, I Say Something Nice About Ronald Wilson Reagan

by Ken Houghton

UPDATE: See correction from Tom in comments. Oh well.

Reagan defenders are perpetually saying that, after he created massive deficits and a recession with the 1981 tax cuts, his people learned better, and all of the following tax cuts were "revenue-neutral."

I'll leave it to the folks at AngryBear to graph out the truth of that statement; suffice to say, the 1986 revision (discussed here and, most especially, here, to pick two from Divorced One Like Bush) has long been cursed by me. Generally, 1986 made it harder to get out of a poverty trap, and easier to maintain Generational Wealth without doing anything.*

But—or, probably, for example—the one thing that 1986 did was eliminate the first $250,000 per person on gains from the sale of real property.** And since there is no chance we will make anything near that limit, there is no chance that I will have to negotiate with the IRS over why we haven't didn't buy another house in the United States over the following two years.****

And, in part, we have RR to thank for it.

*If you believe either of those two is a good idea, please explain your theory of economic growth, and Why No One Will Publish It Except the AEI.

**Technically, I believe the ceiling was set lower, and raised either seven or ten years later.*** But Reagan set the standard for considering basic housing to be "an investment."

***Strangely, those try to cast some portion of the blame for the housing boom/bust on that Clinton administration action ignore that the standard was set by Their Leader.

****This, of course, assumes the current house can be sold.

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Fuck Reagan.

Credit where due: this was a Clinton proposal, which became the Taxpayer Relief Act of 1997. And the exemption for profits rolled into a new house is gone.
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