Hero of the GOP Ronald Reagan Agrees with Obama on Taxes

Hero of the GOP Ronald Reagan Agrees with Obama on Taxes

“If you look at my father […] today, the argument against him would come from the Right; not from the Left. He would have trouble getting his own nomination, but yet he ended up being the greatest president in our lifetimes.”

~Michael Reagan

Think Progress has put together a video montage comparing footage of Presidents Ronald Reagan and Barack Obama agreeing, nearly word-for-word, on taxing the rich and closing tax loopholes.

President Reagan made the remarks below in a June 6, 1985 speech at Atlanta’s Northside High School, while campaigning for a broad tax-reform proposal that ended up passing in 1986.

“We’re going to close the unproductive tax loopholes that have allowed some of the truly wealthy to avoid paying their fair share. In theory, some of those loopholes were understandable, but in practice they sometimes made it possible for millionaires to pay nothing, while a bus driver was paying ten percent of his salary, and that’s crazy. […] Do you think the millionaire ought to pay more in taxes than the bus driver, or less?”

A few weeks later, in Chicago Heights, Illinois, Reagan expounded on his belief that tax reform was needed because it was wrong to let millionaires and corporations pay taxes at lower rates than working people. He also tells a story about a letter from a business executive that may sound familiar:

“The result is that workers sometimes find themselves paying higher taxes than the giant corporations they work for, and hardworking families have to struggle under a growing tax burden while the special interests get a free ride. Now, we’re not against big corporations—they provide many of the jobs, goods, and services that keep America strong. It’s the system that’s unfair, and that’s what we’re going to change.
 
Just a few moments ago, I told some people inside the building here of a letter that I just received the day before yesterday. It’s a letter from a man out here in the country, an executive who’s earning in six figures—well above $100,000 a year. He wrote me in support of the tax plan because he said, “I am legally able to take advantage of the present tax code—nothing dishonest, doing what the law prescribes—and wind up paying a smaller salary than my secretary gets — or I mean, paying a smaller – I’m sorry, paying a smaller tax than my secretary pays.” And he wrote me the letter to tell me he’d like to come to Washington and testify before Congress as to how that’s possible for him to do and why it is wrong. So, this is the kind of spirit that is going on throughout the country.”

Below is Reagan’s entire speech from June 6, 1985.

 

Remarks to Citizens in Chicago Heights, Illinois
June 28, 1985
Ronald Reagan

Thank you, Governor Jim Thompson and Mayor Panici. It’s great to be here with your senior Senator, Alan Dixon, with three of Illinois’ finest Representatives—your own George O’Brien, John Grotberg, Phil Crane, State Senator DeAngelis.

I came to talk about tax fairness and simplification. But first, I want to say a few words about a subject that I know is on all our minds: the outrage of international terrorism.

When terrorism strikes, civilization itself is under attack; no nation is immune. There’s no safety in silence or neutrality. If we permit terrorism to succeed anywhere, it will spread like a cancer, eating away at civilized societies and sowing fear and chaos everywhere. This barbarism is abhorrent, and all of those who support it, encourage it, and profit from it are abhorrent. They are barbarians.

In a different age, the civilized world faced the bloody scourge of piracy. It was a long fight against a great but diffuse evil. But it was won in the end because civilized nations refused to succumb and missed no opportunity to stamp it out. The United States can be proud of the role that it played in that struggle, a role our marines still sing about in the marine anthem.

In our time, it’s terrorism that must be overcome. We cannot accept these repeated and vicious attacks against our nation and its citizens. Terrorists, and those who support them, must and will be held to account.

But now, onto a happier and brighter subject, one that is very close to your families and America’s future—that’s our plan to completely overhaul our tax system. We’re going to junk the present code with its loopholes and shelters and special interest provisions and replace it with a fairer, simpler plan, written with the average American in mind—a plan that rewards hard work, supports our families, protects the old and the poor, and gives the U.S. economy a powerful boost ahead in world competition.

Today I’m bringing you a message of hope and opportunity and a call to action. America is the greatest country on this Earth, but our tax system is a disgrace. It is unworthy of us. Ours is a government of the people, but our tax code seems designed of, by, and for the tax lawyers. The time for excuses has past. Let’s turn the years of bitterness, frustration, and anger at paying unfair and wasteful taxes into a ground swell of support for change.

Now, I know some people are skeptical-too often before they’ve seen America’s hopes for tax fairness shot down by the special interests. Well, the lobbyists are out in force again; they’ve dug in around the Capitol building in Washington, trying to keep the special interests in and the people’s interests out. But they’ve forgotten one thing—this time they’re going to have to contend with the allied forces of the President and Chicago’s own Dan Rostenkowski, chairman of the House Ways and Means Committee. And if they think that things have been hot so far, Ron and Rosty have got news for them— [laughter] —you ain’t seen nothin’ yet.

Now, this issue goes beyond Democrat or Republican—it’s simply a matter of doing what’s right for America. And if we work together with good faith and determination, the people can win this time, and they will win.

In the past, positive change has been daunted by the sheet size and complexity of the tax code. Ordinary people couldn’t even hope to understand it, so taxes became the specialty of the high-priced tax consultants, who spend their whole lives mastering its intricacies and manipulating the code for the benefit of their intricacies and manipulating the code for the benefit of their privileged clients. The result is that workers sometimes find themselves paying higher taxes than the giant corporations they work for, and hardworking families have to struggle under a growing tax burden while the special interests get a free ride. Now, we’re not against big corporations—they provide many of the jobs, goods, and services that keep America strong. It’s the system that’s unfair, and that’s what we’re going to change.

Just a few moments ago, I told some people inside the building here of a letter that I just received the day before yesterday. It’s a letter from a man out here in the country, an executive who’s earning in six figures—well above $100,000 a year. He wrote me in support of the tax plan because he said, “I am legally able to take advantage of the present tax code—nothing dishonest, doing what the law prescribes—and wind up paying a smaller salary than my secretary gets—or I mean, paying a smaller-I’m sorry, paying a smaller tax than my secretary pays.” And he wrote me the letter to tell me he’d like to come to Washington and testify before Congress as to how that’s possible for him to do and why it is wrong. So, this is the kind of spirit that is going on throughout the country.

It stands to reason that the more complex our tax code is, the more open it is to abuse. So, we’re making it simple to make it fair. America’s tax plan will do away with special breaks for a few so we can lower the tax rates for all. Our simpler, three-bracket design will assure that no American pays one penny more than his fair share.

Since we unveiled our plan, I’ve received a lot of mail from people who—even though they presently make use of the special breaks in the tax code, as this instance I just gave you—support change for fairness. One man who works in the advertising business wrote, “We can no longer go on asking middle America to finance special interest tax shelters.” Another wrote and said—he described himself as one of the favored few who has the financial resources to take advantage of the tax laws—but he said, “It is wrong for this country to subsidize those of us who are truly wealthy and pay no Federal income tax.” When it comes to making our tax system fairer, he said, “right is right,” and “I put on my American citizen hat and set aside my partisan position.”

Well, right is right, and fair is fair, and it’s time for all of us to put on our American citizen hats and do the right thing for America. By closing the loopholes, we can bring tax rates down for the vast majority of Americans. Our tax proposal is the opposite of trickle down; it’s bubble up.

Most important of all, America’s long suffering families will get dramatic tax relief. The fair share plan gives all of America’s families a much-needed break by lowering the tax rates, increasing the standard deduction, making tax deductible IRA’s equally available to homemakers, and best of all, nearly doubling the personal exemption so that you can deduct $2,000 for yourself and every one of your dependents.

And we propose indexing that so that if inflation continues to make that $2,000 not worth as much as it was when we started, we’ll increase the $2,000 exemption. In our view, nearly doubling the personal exemption makes our tax proposal twice as good.

I’ve often said that those people who say there are no more heroes just don’t know where to look. You see them in communities like this one every day—the wage earner, checking in at sunrise at the factory gate; the homemaker, doing the work of 10 to keep the house running; the parents who save and sacrifice and do without so that they can provide their children with the things they need. It’s their hard work, dedication, and faith that keep the American dream alive. Are we profamily? You bet we are. In fact, you might say that the family is the one shelter we approve of. We are also completely exempting the low-income elderly from taxation. We think they’ve worked hard enough all their lives, and they shouldn’t have to carry the IRS on their backs into retirement. And we’re dropping the struggling low-income families from the tax rolls altogether. Giving a leg up on the ladder—that’s what America is all about.

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. American industry will benefit, too, because the billions that are presently being squandered on the loopholes—things like jojoba bean shelters, racehorse write-offs, windmill farms, and luxury lunches for business executives-will be reinvested in the productive economy, where it will build new factories and businesses, create new jobs, and finance the new inventions that will keep America number one in the world market.

The economic misuse of the real estate provisions in our tax code alone is mind-boggling. Some business districts look more like ghost towns, with building after building constructed primarily for tax reasons and never occupied. Tax waste, we should call it. It’s huge, reaching into the multibillion, and you, the American people are paying for it with higher taxes and lower economic growth. It’s time we pulled our money out of the tax shelters and invested it in America’s future.

Now, you can get a feeling for how good our tax proposal will be for our economy. In the month since we announced it, the financial markets have been smiling, interest rates have been falling, the stock market has been rising—to a new record, as a matter of fact, both signs of confidence in the future—and inflation still lies dormant. From that double-digit figure of a couple of years ago, it is down now to 3.7 percent for the last 12 months. I’m not going to be happy until it isn’t even seven-tenths of 1 percent.

But in that time we’ve also seen the special interests fire their first volley to shoot down America’s fair share plan—so far they haven’t made a dent. Our tax plan is strong and solid because it’s fair, and we’re going to make sure it stays that way.

The opponents of our fair share plan have one strategy—to filibuster it to death, to delay, put off, procrastinate. They’ll think of a million excuses for inaction. They’ll study and debate and meet in committee—they’ll nibble at it all summer and then try to bury it deep in the bowels of the next session of Congress. But if we wait, if we let them delay, then we might as well kiss tax fairness goodbye. That’s why we’ve got to set a date—a vote up or down on the fair share plan this year—in 1985.

Now, that means we have to start putting a grassroots coalition together now so that we make sure that Congress will hear the voice of the people over the pleadings of the special interests. We have to be ready to move out this fall with a people’s crusade for our profamily, profairness, profuture tax plan. When Congress gets back to town after summer vacation, I’m heading out into the country—I’m going to campaign all across this nation throughout the fall for tax fairness. We’re going to take it to the people, and we’re going to win one for America.
And I’m going to look to Alan Dixon and George O’Brien, and Phil Crane and John Grotberg to help us marshall the profairness, progrowth forces in the Congress. I didn’t tell them I was going to say that. [Laughter] If we make the commitment now, if we can work together to get the fairness bill through the House and the Senate, we can do it by Thanksgiving. And we’re going to keep this historic reform above politics so that it will truly be an American victory. And then when our nation comes together to celebrate Thanksgiving, we’ll have something extra special to be thankful for.

Then there will be one more step—for the House and the Senate to agree on the final version in conference, and that’ll be the best Christmas present that America has ever had.

We’re asking for your help—keep those cards and letters coming in, start building those grassroots organizations, stand up and be counted, and join the people’s crusade to make 1985 the year that the people won a big one for fairness and justice. In other words: America, go for it!

Thank you. This is my kind of town, and you’re my kind of people—Dixon, Illinois, isn’t too far from here.

God bless you all. Thank you.

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Note: The President spoke at 12:47 p.m. from the front steps of Bloom High School. Prior to his remarks, the President met in the school library with families of the hostages in the TWA hijacking incident.
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Citation: Ronald Reagan: “Remarks to Citizens in Chicago Heights, Illinois ,” June 28, 1985. Online by Gerhard Peters and John T. Woolley, The American Presidency Project. http://www.presidency.ucsb.edu/ws/?pid=38838.

Samuel Warde
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