The Reagan administration cut taxes and increased military spending.
Use this to explain the huge trade deficit that took place at that
time. Why is it that Reagan's restrictions on imports from Japan
failed to reduce the trade deficit?

Tax increases lead to reductions in interest rates, which power
economic growth and reduce unemployment.

Reagan cut income taxes in 1981 (income tax cuts primarily benefit the
top 1 to 5 percent of taxpayers). He then raised general taxes in 1982
and again in 1986 to cover the resulting deficits, resulting in the
largest peacetime tax increase in history. Essentially, Regan shifted
the tax burden down from the top, much as the current Bush is doing.

1982-- TEFRA and Highway Revenue Act; approx 40 billion combined.

1983-- Social Security tax increase; this one is still with us. Thanks, Ron!

1984-- Deficit Reduction Act; approx 20 billion.

1985-- COBRA; increased taxes.

1986-- Tax Reform Act; increased taxes for 2 years.

1987-- OBRA; increased taxes.

1988-- Election year. Surprise! No taxes raised. It's amazing they weren't cut.

Net effect by the end of the Great Communicator's reign was an
increase in taxes to the tune of 100 billion dollars. By 1992, the
effect had grown to $165 billion, NOT including the tax increase the
elder Bush lip read to us.

Anone who think there won't be a tax increase after the new congress
is seated is fooling themselves.