Donald Trump’s speech touting tax cuts — the largest ones ever, he promised — was devoted in large part to praise of the 1986 Tax Reform Act. “Our last major tax rewrite was 31 years ago,” he said. “It was really something special … In 1986, Ronald Reagan led the world, cutting our tax base by 34 percent. Under this pro-America system, our economy just went beautifully through the roof.”
Trump has long attacked the 1986 Tax Reform Act as a disaster. The Act eliminated tax advantages for real estate, and Trump naturally equated the loss of special treatment for his own industry with harm for the economy as a whole. “This tax act was just an absolute catastrophe for the country,” he told Congress in 1991. Eight years later, still fuming that Bill Bradley — a co-sponsor of the law — was running for president, Trump called it “one of the worst ideas in recent history.”
One might wonder why Trump reversed himself. The answer is, he really hasn’t. Republicans have used the aura of the 1986 Tax Reform Act to promote their tax-cut plans. But what they have in mind now is quite different. The 1986 Tax Reform Act was a bipartisan law, which did not reduce revenue to the government, and actually increased the effective tax rate paid by the rich by eliminating special treatment for capital gains and other tax breaks for the rich. Some Democrats have offered to support legislation along those lines, but the Republican leadership has outright refused.
It’s not clear whether Trump is in on his own con, or whether he fails to realize the law he praised at length through the teleprompter is the same one he previously accused of destroying the American economy.