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Unformatted text preview: Reagan's economic policies. Reagan proposed using supply-side economics to cut inflation and increase employment. He believed that lower taxes would lead to an expansion of the economy through greater investment, and more revenue would be generated as business grew. In August 1981, Congress passed the Economic Recovery Tax Act, which cut personal income taxes by 25 percent over a three-year period, reduced the maximum tax rate from 70 to 50 percent, and lowered the capital gains tax. In addition to this act, more than $30 billion was cut from an array of social programs, including housing, job training, and school lunches. The theory did not work as planned, however. Although the president claimed that there was still a "safety net" for those truly in need, the number of Americans living in poverty rose. The tax cut was accompanied by a dramatic increase in the military Americans living in poverty rose....
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This note was uploaded on 11/19/2011 for the course HIST 1310 taught by Professor Marshall during the Fall '08 term at Texas State.
- Fall '08