They saw their portion of the income tax burden climb by almost 50 percent from 11.6 percent to 15.1 percent. The 1980s President Reagan presided over two major pieces of tax legislation which together reduced the top tax rate from 70 percent in 1980 to 28 percent by 1988. The economic effects of the Reagan tax cuts were dramatic. The tax cuts helped pull the economy out of the doldrums and ushered in the longest period of peacetime economic growth in America's history. During the seven-year Reagan boom, economic growth averaged almost 4 percent.
Critics charge that the tax cuts caused higher deficits, but they misread the evidence.
The Reagan tax cut, though approved in 1981, was phased in over several years. The economy received an unambiguous tax cut only as of January 1983. The share of income taxes paid by the top 10 percent of earners jumped significantly, climbing from 48.0 percent in 1981 to 57.2 percent in 1988. The richest 1 percent saw their share of the income tax bill climb even more dramatically, from 17.6 percent in 1981 to 27.5 percent in 1988. Unlike reductions in tax rates, increases in tax rates have a history of failure.