Corporate Tax Reform: Taxing Profits in the 21st Century

Introduction: Before We Begin

A Little Bit of History

January 1983 was a gloomy time at the Reagan White House. The president had promised his 1981 tax cuts would deliver prosperity. But instead the nation was suffering from the worst recession since the days of Herbert Hoover. The unemployment rate was over 10 percent. The Republican gains won in the House of Representatives in 1980 were wiped out in the midterm elections. The president’s approval rating had dropped to 35 percent. The Reagan Revolution was in deep trouble.

It was not just the sagging economy that was pummeling the Reagan presidency. It was the perception that his policies favored the privileged classes. He was being branded as a champion of the rich. The tax cuts were sold ...