Shift on Tax Increases Would Mean Basic Reversal of Reagan's Policy
The preoccupation of Congress and the White House over the last few months with reducing the budget deficit has obscured this basic fact:</br></br>On the issue of taxes Ronald Reagan may be in. the midst of a fundamental reversal of economic policy.</br></br>The centerpiece of the presidentÛªs original economic program last, year was the enormous tax cut he proposed for individuals and business. The $749 billion reduction over six years represented a major achievement for an administration that in many ways views the federal tax system as a detriment to economic development.</br></br>Some critics said the tax cut, especially when coupled with the defense buildup the president was also insisting on, would create unmanageable deficits. The supply-siders advising the president discounted this. They argued that tax cuts were the tonic the economy needed, that they would bring on added growth, that this growth would in turn generate new tax revenues. In this painless formula, the tax cuts would thus pretty quickly pay for themselves.</br></br>So far, however, that hasnÛªt happened, and now, to reduce the forthcoming deficit and help bring down the high interest rates that are choking off growth, leading members of Congress in both parties, many of the presidentÛªs aides and to some extent the president himself are considering raising taxes.