At RealClearPolicy the bipartisan organization No Labels provides a handy comparison of Reagan’s tax reform with Trump’s. Their conclusion:
Ultimately, history will determine how Trump’s tax reform compares with Reagan’s. But one thing is certain: Once a plan is signed into law this year, many Americans will immediately see a difference in their taxes, for better or for worse.
For my money the most significant contrast is that Reagan’s tax reform had bipartisan support while Trump’s does not. The real comparison that should be made is between Trump’s tax reform and the Affordable Care Act.
There’s also one minor correction to their remarks that should be noted:
Reagan’s tax reform lowered the corporate rate to 34 percent. The current House and Senate bills lower the corporate rate to 20 percent, which is more in line with the Organization for Economic Cooperation and Development (OCED) average
There were several rounds of tax reform from 1981 through 1992. Reagan’s tax reforms kept the corporate rate at 40%. George H. W. Bush’s lowered it to 34%.
The only other observation I have is that I think that the notion that the response to tax cuts is linear, i.e. that a cut of six points will impel the same response whether the starting point is 40% or 34% is at best speculative and at worst specious. Will a 12 (or 14) point cut from 34% promote more investment, less investment, or be no different than
a cut from 40% to 34%? No one knows. The one-time, short term repatriation rate of 14% sounds like an excellent idea to me. That could result in an additional $400 billion in federal revenues which can pay for a lot tax cuts. One time, of course, but it’s still nothing to sneeze at.
