Reagan ended inflation with the biggest deflation we have had in this century. The GNP of the United States grew by about 3.9 percent on average over the last six years of the Reagan-Bush administrations. Unemployment went down, the deficit came down as a percentage of the economy, and the assets of America grew with the creation of 5.5 million new small businesses and 21 million new jobs. Mr. Gephardt's Closing Argument Mr. Kemp's rendition of the 1980s is, in some respects, true. It is important as we try to figure out what to do next, that we be willing to look back at past experiments to understand what impacts there were as a result of tax policy.
Tax reform is hard to do.
You go into a room to negotiate and everybody in the world comes up to tell you why his or her deduction is needed in the tax code. In 1986, despite our best intentions, we probably complicated the code. Now the rates are bubbling back up. Over the past sixty years we have tried to use the tax system as the ultimate instrument of guiding social and economic behavior. We have concluded that every problem in the country can be solved by having the Ways and Means Committee or the Senate Finance Committee figure out one more incentive to get somebody to do something that we want him to do.