More facts disputing Necros stance:
http://www.heritage.org/Research/Taxes/BG1414.cfm
Many critics of reducing taxes claim that the Reagan tax cuts drained the U.S. Treasury. The reality is that federal revenues increased significantly between 1980 and 1990:
Total federal revenues doubled from just over $517 billion in 1980 to more than $1 trillion in 1990. In constant inflation-adjusted dollars, this was a 28 percent increase in revenue.3
As a percentage of the gross domestic product (GDP), federal revenues declined only slightly from 18.9 percent in 1980 to 18 percent in 1990.4
Revenues from individual income taxes climbed from just over $244 billion in 1980 to nearly $467 billion in 1990.5 In inflation-adjusted dollars, this amounts to a 25 percent increase.
Federal spending more than doubled, growing from almost $591 billion in 1980 to $1.25 trillion in 1990. In constant inflation-adjusted dollars, this was an increase of 35.8 percent.6
As a percentage of GDP, federal expenditures grew slightly from 21.6 percent in 1980 to 21.8 percent in 1990.7
Contrary to popular myth, while inflation-adjusted defense spending increased by 50 percent between 1980 and 1989, it was curtailed when the Cold War ended and fell by 15 percent between 1989 and 1993. However, means-tested entitlements, which do not include Social Security or Medicare, rose by over 102 percent between 1980 and 1993, and they have continued climbing ever since.8
Total spending on all national security programs never equaled domestic spending, even when Social Security, Medicare, and net interest are excluded from domestic totals. In addition, national security spending fell during the Administration of the senior President Bush, while domestic spending increased in both mandatory and discretionary accounts.9 (See Chart 1.)
In 1991, after the Reagan rate cuts were well in place, the top 1 percent of taxpayers in income paid 25 percent of all income taxes; the top 5 percent paid 43 percent; and the bottom 50 percent paid only 5 percent.13 To suggest that this distribution is unfair because it is too easy on upper-income groups is nothing less than absurd.
The proportion of total income taxes paid by the top 1 percent rose sharply under President Reagan, from 18 percent in 1981 to 28 percent in 1988.14
Average effective income tax rates were cut even more for lower-income groups than for higher-income groups. While the average effective tax rate for the top 1 percent fell by 30 percent between 1980 and 1992, and by 35 percent for the top 20 percent of income earners, it fell by 44 percent for the second-highest quintile, 46 percent for the middle quintile, 64 percent for the second-lowest quintile, and 263 percent for the bottom quintile.15
These reductions for the lowest-income groups were so large because President Reagan doubled the personal exemption, increased the standard deduction, and tripled the earned income tax credit (EITC), which provides net cash for single-parent families with children at the lowest income levels. These changes eliminated income tax liability altogether for over 4 million lower-income families.16
http://www.businessweek.com/bwdaily/dnflash/jun2004/nf20040610_9541_db038.htm
Reagan was responsible for boom of 1990s, not Clinton
"On Aug. 13, 1981, President Ronald Reagan signed the legislation that defined his vision for the U.S. economy. The Economic Recovery Tax Act, also known as the Kemp-Roth bill, slashed taxes for many individuals and corporations and ushered in a new era. From that date on, government would play a far smaller role in the economy, and markets would reign supreme.
Just the previous day, with far less attention and fanfare, IBM (IBM ) announced the introduction of its first personal computer, the IBM PC. Powered by a microprocessor from Intel (INTC ), which then had revenues of less than $1 billion, and sporting an operating system by a virtually unknown company called Microsoft (MSFT ), the IBM PC, and the machines that followed, took the country by storm.
TAX CUTTER. In a way that few have realized, Reagan's economic legacy is inextricably interwoven with the Information Revolution that the IBM PC helped kick off. His message of competitive markets, entrepreneurial vigor, and minimal regulation found a willing audience in an era of rapid technological change, where innovation was opening new opportunities seemingly every day. Reagan's first term saw the creation of such future giants as Sun Microsystems (SUNW ), Compaq Computer, Dell (DELL ), and Cisco Systems (CSCO ) -- the greatest entrepreneurial burst of new companies since the early 20th century.
It's likely that those companies would still have been founded, and would have prospered, even if Reagan hadn't been elected. Moreover, some of his policies, such as reduced support for nondefense research and development, were negatives for a tech-driven economy.
But the Californian's program of slashing taxes was perfectly suited to -- and helped foster -- the new environment, with its emphasis on investment in human capital and ideas rather than heavy equipment. His tax bills -- including the 1981 legislation and the major 1986 Tax Reform Act -- whacked the marginal tax rates on top earners from 70% to about 30% and made it far more attractive for people to raise their incomes by getting more education or taking the risks of starting a company.
FOSTERING INNOVATION. In addition, Reagan's 1986 tax-reform bill had another major impact. The new law helped support "idea-based" industries such as software and financial services. It lowered corporate tax rates for those companies while cutting or eliminating provisions in the tax code, such as the investment tax credit, that had primarily benefited old-line industries like utilities and railroads. The effect on corporate tax bills was immediate: Oracle's (ORCL ) average tax rate fell from 44% in 1986 to 32% once the law took effect. Microsoft's taxes saw a similar decline.
Taken together, the changes Reagan championed in the tax system fostered innovation and entrepreneurialism even as they encouraged the development of venture capital and investment in human capital. And Reagan's willingness to push for more flexible labor markets and less regulation helped companies react faster to economic changes, including new technologies.
As a result, the impact of the policies Reagan set out in the 1980s, which slowly worked their way through the economy, helped lay the groundwork for the Information Revolution of the 1990s. That's nothing to sneeze at, especially since technology has been the major factor driving the U.S.'s rapid productivity growth since 1996.