Ronald Reagan and economics

By Raymond J. Keating

Ronald Reagan easily was the most pro-entrepreneur, pro-small business president of the United States over the last 70-plus years. His policies of restraining the growth in federal regulations and slashing tax rates provided a solid foundation upon which our economy expanded over the past two decades.

Consider what Reagan accomplished in terms of some key tax rates. During his time in the White House, the top personal income tax rate tumbled from 70 percent to 28 percent. The corporate rate fell from 46 percent to 34 percent. And death tax rates were cut and exemptions increased as well. The top estate tax rate was 70 percent when Reagan took office, and it fell to 50 percent.

On the regulatory front, total real regulatory costs declined by better than 14 percent from 1980, the year before Reagan took office, to 1988, his last full year as president. These tax and regulatory policy changes boosted incentives for investing and risk taking, and helped spark the economic revival of the U.S.

A new book, "Reagan, In His Own Hand: The Writings of Ronald Reagan That Reveal His Revolutionary Vision of America," is a book of great historical significance.

The collectionof writings clearly show a man who had a firm, principled understanding of a wide range of issues -- from defense and foreign affairs to the economy and fiscal policy.

For example, regarding Social Security, Reagan wrote in January 1978: "Truth is if we could invest our and our employer's share of the Social Security tax in savings or insurance we could double the return promised by Social Security."

As for budget surpluses, Reagan observed in a July 1979 essay: "I have always believed that government has no right to a surplus ... that it should take from the people only the money necessary to fund government's legitimate functions."

Ronald Reagan understood the American entrepreneur.

Raymond J. Keating is chief economist for the Small Business Survival Committee in Washington, D.C.