Ronald Reagan, as governor of California, enacted significant tax increases and expanded the state budget. As president, his Reaganomics policy, particularly the Economic Recovery Tax Act of 1981, was characterized by tax cuts for high earners, but led to a substantial increase in national debt and government size, contrasting with his initial campaign promises.
Reagan's Economic Policies
During his tenure as governor of California, Ronald Reagan faced the challenge of balancing budgetary demands with his campaign rhetoric of reduced government spending. Despite his initial promises, he approved significant tax increases and the largest budget in the state's history. As president, Reagan implemented Reaganomics, advocating for lower taxes, especially for high earners, to spur economic growth through investment and innovation. The Economic Recovery Tax Act of 1981 was a key part of this policy.
However, the result was a near tripling of the national debt and an expansion of the federal government, against his promise of fiscal responsibility and smaller government.
Reagan's policies remained controversial. Critics pointed out that these policies favored the wealthy at the expense of the poor, leading to increased budget deficits and soaring national debt. Nonetheless, economic growth did resume, and by the end of his presidency, unemployment had significantly decreased. President Reagan's legacy on tax policy and government spending continues to be a topic of debate.