Talk:Economic Recovery Tax Act of 1981

Discussion

Who initated this bill, and was it part of thr Presidents plan?

Is it just coincidence that this page has the exact same words: http://www.tutorgig.com/encyclopedia/getdefn.jsp?keywords=Kemp-Roth_Tax_Cut

The final vote in the House was 282-95

https://www.congress.gov/bill/97th-congress/house-bill/4242/all-actions?q=%7B"roll-call-vote"%3A"all"%7D#:~:text=House-,Passed%20House%20(Amended)%20by%20Yea-Nay%20Vote%3A%20323,Record%20Vote%20No%3A%20178).

The Kemp-Roth Tax Cuts

Well, someone was copying! It does look like "tutorgig" is pulling from Wikipedia since not all of the links lead to real pages at tutorgig, and ones that do are also copies of Wikipedia (minus the graphics!).

I changed the structure of the page since one paragraph was too bulky, and changed some of the wording to be more precise.

Kemp and Roth originally proposed an across the board tax cut in 1977. Various bills in Congress were submitted but it was not until Reagan endorsed the tax cuts as part of his 1980 platform did they have a chance of passing.

Stupendous Man 04:07, 2004 Feb 16 (UTC)

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Just a question: what is the controversy over whether or not the tax cuts increased govt. revenue? Wouldn't this be a fairly easy thing to check out? I'm not advocating here, just saying it needs a better explanation. Meelar 03:52, 16 Feb 2004 (UTC)

The Reagan administration chief economic planner, David A. Stockman wrote a book on all his years in Washington that was published in 1985, where he points to the Kemp-Roth Tax cuts as the beginning of all the woes and huge deficits that were to follow. 84.215.50.65 (talk) 23:15, 23 December 2009 (UTC)

Tax Changes

The problem is that there were a number of tax changes and not all government revenues can be tied to a specific tax.

For example, income taxes increased after the tax cuts, and at a faster rate than prior to the tax cuts. Proponents point to that as proof that the tax cuts worked. Critics maintain that the economy improved (but not due to the tax cuts) and thus income taxes increased, and some critics claim that revenues would have been even higher without the rate cuts.

There have been studied, such as lawrence Lindsey's The Growth Experiment, but it's virtually impossible to isolate a specific reason for revenue increases/decreases.

Other taxes, such as the capital gains tax, are easier to isolate and analyze.

Stupendous Man 04:07, 2004 Feb 16 (UTC)

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Got it. If you don't mind, I'll merge that into the article. Meelar 04:09, 16 Feb 2004 (UTC)

Table removed

An anonymous editor removed a table from the article, with the following in the edit summary:

Removed table: it was not a "nonpartisan" study and was not an official study by the Treasury Department. As clearly stated in the article cited it is the *opinion* of the author only

The article should have been changed to remove the word "nonpartisan" IF it was not clear from the source document whether the material was "nonpartisan" or not (or if the "nonpartisan-ness" could not be otherwise verified). However, the fact that the study was the opinion of the author -- as stated in the source document -- has nothing to do with whether the table should be in the Wikipedia article. Also, whether the study was an "official study" by the Treasury Department is not material to whether the table should be in the article.

Actually, the paper probably would be considered an official study by the Department. The name of the study is OTA Working Paper 81, "Revenue Effects of Major Tax Bills," by Terry Tempalski, Office of Tax Analysis, Office of the Assistant Secretary for Tax Policy, U.S. Department of the Treasury (Rev. Sept. 2006). Although it's "official" (in the sense that it was apparently issued by the Department, not merely by Mr. Tempalski alone), the paper is not necessarily representative of an "official Treasury position or policy" -- and the paper does say that. However, whether the paper was officially issued by the Department and whether the paper represents the official policy or position of the Department are two different things. There are lots of official Department releases that do not necessarily represent an official policy or position OF the Department.

The table is arguably a bit tangential to the article, but perhaps not overly so. Also, the language introducing the table (i.e., the introductory language that was removed along with the table) might be prohibited original research -- but I'm not sure. At any rate, I don't have a strong personal view pro or con as to whether the table should be put back into the article.

We just need to understand what makes stuff objectionable -- and what does not -- under the rules of Wikipedia. Famspear (talk) 20:30, 17 April 2008 (UTC)

Correction: I should have said that the author of the Treasury document is "Jerry Tempalski," not "Terry Tempalski." Famspear (talk) 15:11, 18 April 2008 (UTC)

Effect and controversies

The last two sentences of the last paragraph of this section needs cleaned up.

There is one part that is cited that claims revenues were down 4% the fourth year after enactment. The only location in the cite that gave a 4% is actually on page 17 of the PDF. The cite points to page 12 instead. There is no 4% on page 12. A correct cite of page 17 would be: The treasury dept. projected a 4.15% reduction in revenues as a percentage of the GDP of 1985 if the 1981 act had not been enacted and the GDP still increased as it did.

However that is an assumption that tax changes have no effect on economic growth. Would the GDP growth in 1985 be as strong as it was if there were no tax code changes from 1980? No one really knows since we can only see what happened in different periods of US history with tax code changes. We can only guess based on history.

>>The last sentence that is cited (number 8) should be changed to correctly reflect what I noted above. Tax revenues for every year after 1981 to the US treasury increased according to treasury figures.

Indeed. So why does that last sentence exist at all? Last sentence states that the Office of Tax Analysis claims that revenue would have been 13% higher had it not been for the tax cut and then references page 12 of an OTA document. I found that highly suspicious, so I went to page 12 of said document and no such 13% claim is found there. So I think I'm just going to delete that last sentence.

The very last sentence could be incorporated into the sentence that mentions the Laffer curve. Laffer contends that a lower tax rate of around 25% with none or few deductions promotes both economic growth and higher tax compliance. That is why it was called a "curve", where the maximum tax revenues could be determined. This tax economic theory could actually be modeled after what Andrew Mellon promoted in the "Mellon plan" during the 1920's. Read: http://www.thefreemanonline.org/columns/our-economic-past-andrew-mellon-the-entrepreneur-as-politician/

Ronaldusmax (talk) 19:39, 7 October 2011 (UTC)

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Federal reserve sent federal funds rate up; market-based interest rates

The article had stated that the ERTA resulted in soaring interest rates. This is an inference, not a fact. In fact, after the passage of the ERTA, the Federal Reserve hiked the federal funds rate soaring, at one point to nearly ten percent more than the market-controlled interest rates. The fact that banks were charged more interest than they could receive from lending certainly halted economic investment and contributed to the 2nd dip of the recession. The point of raising the federal funds rate is to cool inflation caused by the economy over-heating. The fact that the federal funds rate was raised so far above market rates, and resulted in a second dip of a recession suggests that the Federal Reserve badly over-reacted.

Further, the article had said "much of the 1981 ERTA was backed out in September 1982." That's not a reasonable description. The system for accelerated depreciation deductions, a fairly minor element of the tax reform, was replaced. The hint that a non-existent functional repeal of ERTA, rather than ERTA itself, caused the Reagan expansion is thus false.

Para needs major work!

The paragraph that begins, "The cornerstone of discussing economic reform or ideology comes down to supply and demand." needs major work. It goes downhill after a poor start.

I am not qualified in this subject and would like to have someone with real credentials take a turn here.

Feel free to google me to talk about this if you have the necessary facts. — Preceding unsigned comment added by MartinRinehart (talk • contribs) 18:59, 29 December 2017 (UTC)

Fanatical Focus Seen

I think this article is extremely selective and as such biased. I did not like Kemp-Roth and did not support it but that does not mean I would write a slanted essay. There is nothing about the effect on Congress. I remember a very poignant quote "If we don't cut smart, they will cut stupid" referring to the budget provisions of the bill. I must observe that the writers are more intent on their own priorities and what leads to their own conclusions, than reporting the facts. I am not saying their conclusions are wrong, they are likely correct in what they say about the tax package. But it is VERY wrong to talk only about that.