“The prospects are pretty high that, in the end, we’ll get something called tax reform, but it won’t be real tax reform.”
—RICHARD RAHN, CHIEF ECONOMIST, US CHAMBER OF COMMERCE1
BY 1984 THE COUNTRY WAS LEARNING THE LESSONS OF THE Great Experiment. The economy was recovering, inflation had dropped precipitously and stabilized, unemployment was declining, and, thanks to ERTA, Americans were enjoying bigger paychecks, in real terms, for the first time in more than half a decade. In addition, as the first detailed data on the tax cut came in, the most important supply-side contention was proving true: The rich were paying more in taxes at lower rates.
In four years, voodoo economics had traveled a good part of the distance ...