According to wikipedia In 1981 Reagan significantly reduced the maximum tax rate which affected the highest income earners and lowered the top marginal tax rate from 70 to 50 in 1986 he further reduced the rate to 28 The federal deficit fell from 6 of GDP in 1983 to 3 2 of GDP in 1987 The Federal deficit in Reagan s final budget fell to 2 9 of GDP Also according to wikipedia it was increased borrowing not increased spending that lead to Reagan deficits as a short run strategy to reduce inflation and lower nominal interest rates the U S borrowed both domestically and abroad to cover the Federal budget deficits raising the national debt from 997 billion to 2 85 trillion This led to the U S moving from the world s largest international creditor to the world s largest debtor nation Also according to wikipedia during the Reagan administration federal receipts grew at an average rate of 8 2 2 5 attributed to higher Social Security receipts