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PolitiFact: Reagan tax cuts benefited biggest incomes

The statement

In the 1980s, "The lowest income people had the biggest gains."

Stephen Moore of the Wall Street Journal, on HBO's Real Time with Bill Maher on Jan. 21

The ruling

Rachel Maddow got into a back-and-forth with Stephen Moore of the Wall Street Journal on HBO's Real Time with Bill Maher.

Moore got the ball rolling with, "I say the Reagan tax cuts were the greatest economic policy of the last 50 years."

Moore said the economy boomed. Maddow said the deficit went up. Moore said the value of assets soared.

"Awesome," Maddow said. "What happened to the top first, 1 percent of the country? Their income went up roughly 80 percent."

"Everybody's income went up," Moore said.

Maddow began to cite a statistic about median wage from 1980 to 1990 when Moore interrupted.

"The facts are the facts, Rachel. The lowest income people had the biggest gains," Moore said.

Gary Burtless, an economist at the centrist-to-liberal Brookings Institution, said U.S. census data doesn't back Moore up.

According to census data, when presented in equivalent 2009 dollars, the income among the lowest fifth of the population increased about 6.3 percent (from $10,682 to $11,400). That's the lowest gain compared to other quintiles. Incomes rose 28.2 percent among the top 5 percent.

"These results clearly show that low-income Americans did not obtain the biggest income gains between 1980 and 1990," Burtless said.

According to the U.S. census, the share of the aggregate income received by families decreased in every quintile except the top quintile (where it increased from 41.1 to 44.3 percent). In other words, the richest Americans held a larger share of all income in 1990 than in 1980.

Economists Thomas Piketty and Emmanuel Saez also analyzed income via tax data. According to their study, average inflation-adjusted income (pre-tax) per family in the top 1 percent increased from $427,000 in 1980 to $661,000 in 1990. That's a 55 percent increase. Meanwhile, the average per family in the bottom 90 percent fell from $30,900 in 1980 to $30,800 in 1990.

Saez, an economics professor at the University of California at Berkeley, said there was "increased concentration at the top and big losses at the bottom."

We rule Moore's statement False.

For other rulings, go to

PolitiFact: Reagan tax cuts benefited biggest incomes 02/03/11 [Last modified: Thursday, February 3, 2011 9:37pm]
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