(CNSNews.com) - In reiterating on Wednesday his proposal that the federal government should increase taxes on wealthy Americans, President Barack Obama said he was following the model of President Ronald Reagan, whom he mockingly called--in likening himself to Reagan--a "wild-eyed socialist."
"That wild-eyed socialist, tax-hiking class warrior was Ronald Reagan," Obama said, while contending his idea for increasing taxes on high-income earners was derived from the philosophy and policies of the conservative, Republican president who served in the White House from January 1981 until January 1989, and who died in 2004.
Obama described his plan as one that would make sure that Americans who make $1 million per year or more--"like my friend Warren Buffet"--will pay at least the same percentage of their income in federal taxes as middle-class people.
"I’m not the first President to call for this idea that everybody has got to do their fair share," Obama said, flanked by a group he described as wealthy people "who haven't been asked to do their fair share."
"Some years ago, one of my predecessors traveled across the country pushing for the same concept," said Obana. "He gave a speech where he talked about a letter he had received from a wealthy executive who paid lower tax rates than his secretary, and wanted to come to Washington and tell Congress why that was wrong. So this President gave another speech where he said it was 'crazy'--that's a quote--that certain tax loopholes make it possible for multimillionaires to pay nothing, while a bus driver was paying 10 percent of his salary. That wild-eyed, socialist, tax-hiking class warrior was Ronald Reagan.
"He thought that, in America, the wealthiest should pay their fair share, and he said so," said Obama. "I know that position might disqualify him from the Republican primaries these days, but what Ronald Reagan was calling for then is the same thing that we’re calling for now: a return to basic fairness and responsibility; everybody doing their part. And if it will help convince folks in Congress to make the right choice, we could call it the Reagan Rule instead of the Buffett Rule."
In fact, President Reagan signed legislation dropping the top marginal income tax rate from 70 percent to 28 percent. Yet, despite slashing the income-tax rate on the wealthiest Americans, the percentage of federal income taxes actually paid by the wealthiest Americans increased.
Economist Arthur Laffer, who had inspired Reagan's supply-side tax cuts, later explained the measurable effect they had on federal revenue in a report he published with the Heritage Foundation in 2004.
"The most controversial portion of Reagan's tax revolution was reducing the highest marginal income tax rate from 70 percent (when he took office in 1981) to 28 percent in 1988," Laffer wrote. "However, Internal Revenue Service data reveal that tax collections from the wealthy, as measured by personal income taxes paid by top percentile earners, increased between 1980 and 1988--despite significantly lower tax rates."
In 1981, the year Reagan took office, people in the top 1 percent for adjusted gross income paid only 17.6 percent of federal income taxes, according to IRS data, Laffer noted. By 1988, Reagan's last year in office, when his tax cuts were fully in effect, people in the top 1 percent for adjusted gross income were paying 27.5 percent of the income-tax revenue brought in by the federal government.
Were Obama to truly emulate Reagan, he would slash the income tax rate paid by the wealthiest Americans--and, thus, increase the share of taxes paid by those same Americans.