Author Archives: Haley McGill

Reaganomics, Tax Cuts, and Income Inequality

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By Aidan Aybar and Haley McGill

Ronald Reagan was elected as the 40th President of the United States in 1980 and served from 1981-1989. He was a member of the Republican party, he enacted many conservative policies during his two terms, including a set of economic policies that came to be known as “Reaganomics”. 

Reagan focused on “supply side” economics and the idea that tax cuts would expand the economy and increase federal government revenue (Reagan Library). The 1970’s were a period of economic stagnation and inflation. During this time, “the inflation rate peaked at just over 13 percent, and prime interest rates rose as high as 21-and-a-half percent” (Gramm). When Reagan took office, he sought to improve the economy and took a different approach to solve the problem. 

To do this, Reagan took several steps during his first year. Reaganmoics included policies such as “engineer[ing] the passage of $39 billion in budget cuts into law”, “25 percent tax cut spread over three years for individuals”, and “faster write-offs for capital investment for business” (Reagan Library).

The tax cuts had significant impacts on the economy and functioned as an expansionary policy. Inflation dropped from 13.5% in 1980 to 5.1% in 1982 and a recession set in with unemployment levels of over 10% in October of 1982 (Reagan Library). For the remainder of Reagan’s two terms, there was record economic growth and low unemployment rates along with “record annual deficit and a ballooning national debt” (Reagan Library). 

In 2017, Donald Trump “signed into law the biggest tax overhaul since the Tax Reform Act of 1986” (Gale et al). These tax cuts are expiring soon, but the current administration is in favor of extending them. Over the past 40 years, “income inequality has increased sharply” (Tax Policy Center). Income taxes can help mitigate income inequality as “high-income households pay a larger share of their income in total federal taxes than low-income households” (Tax Policy Center). Therefore, it is important to investigate the historical impacts of Reagan’s tax cuts on inequality as the current administration seeks to enact similar economic policies.

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The Impact of the “No Child Left Behind” Act on Inequality

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By Aidan Aybar and Haley McGill

George W Bush introduced the No Child Left Behind Act (NCLB) in 2002 with the goal “to expand opportunities for American children of all backgrounds and provide all our children with the quality education they deserve while preserving local control” (White House Archives). The NCLB required all schools to test children on their reading and math skills and report results. These results and goals were known as Adequate Yearly Progress (AYP). Children were required to be tested every year from third to eighth grade and they were also tested once in high school. The goal of NCLB was to have all students reach the level of “proficiency” that each state set for itself by 2013-2014. Each state chose what tests to use meaning they were not standardized across the nation. 

If schools did not meet the requirements, the NCLB distributed consequences. “A school that misses AYP two years in a row has to allow students to transfer to a better-performing public school in the same district. If a school misses AYP for three years in a row, it must offer free tutoring. Schools that continue to miss achievement targets could face state intervention. States could “choose to shut these schools down, turn them into charter schools, take them over, or use another, significant turnaround strategy” (Klein). The purpose of these consequences was to encourage schools to stay on track and if they did not meet the consequences, students would end up in better situations. 

The results of the No Child Left Behind Act proved to be less promising. There seemed to be a wide range of results based on the income level of the school district. When comparing the math exams of New York in particular, “[w]hile 86.3 percent of students in rich, or so-called low-need districts scored proficiently, only 28.6 percent did so in Buffalo, 30.1 percent in Syracuse, and 33.1 percent in Rochester” (Herszenhorn). The resources that children have access to seemed to greatly affect their test scores. Additionally, in lower resourced schools, students had much larger class sizes which could have also been a factor in their low test scores (Herszenhorn). 

In his New York Times opinion piece, Sean F Reardon, a Professor of Education and sociology at Stanford, shares a similar sentiment (he wrote his piece in 2013, 11 years after the NCLB was enacted). When analyzing the scores of math and reading standardized tests over 1960-2010, he found that “rich-poor gap in test scores [was] about 40 percent larger [in 2013] than it was 30 years ago” and “the rich now outperform the middle class by as much as the middle class outperform the poor” (Reardon). 

But let’s see what the economic data says about it.

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