My History Can Beat Up Your Politics RONALD REAGAN PART SEVEN: Tax Reform, Amnesty, Bitburg and Banking
Mar 30, 2026
They cover Reagan's big 1986 tax overhaul and the closed-door negotiations that shaped it. They recount the controversial 1985 Bitburg/Wittegrave diplomatic trip and its political fallout. They discuss 1986 immigration amnesty and the Greenspan Commission rescue of Social Security. They trace deregulation of savings and loans and the warnings ignored before the costly collapse.
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Reagan's Hidden Campaign For 1986 Tax Reform
- Ronald Reagan proposed a major tax overhaul in his January 1984 State of the Union that many in Congress initially laughed at.
- Behind the scenes Don Regan and James Baker quietly forged bipartisan support, meeting with Democrats like Bill Bradley to craft the 1986 Tax Reform Act.
1986 Tax Reform Simplified Rates And Closed Loopholes
- The Tax Reform Act of 1986 drastically simplified rates from 14 brackets to three (15, 25, 35%) and trimmed itemized deductions to core ones.
- It cut corporate tax to 33%, adjusted capital gains for inflation, and 78% of taxpayers saw decreases or no change.
Bipartisanship Made 1986 Tax Reform Possible
- Tip O'Neill called the 1986 reform the one bright spot of Reagan's second term because it shifted tax burdens and marked bipartisan cooperation.
- The bill moved $20 billion from individuals to corporations and required GOP buy-in to be truly bipartisan.