Quick: Who is most responsible for the Reagan tax cuts?
Donald Regan, Secretary of the Treasury during Reagan’s administration?
Nah, the real force behind the Economic Recovery Act of 1981 was Jodie Foster, according to Robert Mundell, Columbia University’s Nobel laureate economist.
The Financial Times reports that Mundell cites the Oscar winning actress as most responsible for the sweeping tax cuts of 1981. How so? It’s tricky so follow me on this one…
Jodie Foster starred in Taxi Driver. In that movie, Robert DeNiro attempted to assassinate a politician. John Hinckley was reportedly inspired by the movie to attempt to kill President Reagan – in order to impress the actress.
Mundell believes that the wave of sympathy for Reagan following the assassination attempt deterred Congress from voting against Reagan’s tax plan. The result was a 25% reduction in federal income taxes – a revolutionary change in our tax system. In the years that followed, the US enjoyed a period of relatively positive growth.
Thus, Mundell concludes, “Taxi Driver is the most important movie ever made from the standpoint of creating GDP. It’s the movie that made the Reagan revolution possible. That movie was indirectly responsible for adding between $5trn and $15trn of output to the US economy.”
Pretty amazing conclusion, no?
(Hat Tip: Tax Prof blog)
(Image: Newscom)
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