High taxes always drive capital away into unproductive tax havens.
Reagan's achievement was to eliminate tax shelters in exchange for lower tax rates. This pulled the investment out of those unproductive shelters into productive activities, leading to the prosperity of the 80s.
Reagan created and governed on unprecedented peacetime deficits caused by his military spending and tax changes. If his policy had any meaningful influence over the economy of the 80s it's likely the massive deficit spending.
That said, the link between presidential policy & short term economic changes is universally overstated. The government can cut down basic research funding and the effects won't be felt for a half century.
My point was his policies caused a shift in investment capital away from unproductive tax shelters and into productive investments. Eliminating the tax shelters was part of the deal he made with Democrats to get the budget passed.
That can't help but produce positive economic changes.
Prosperity of the 80s? You mean the era that signalled the end of the post-war golden age of capitalism and brought about hyper-financialisation (which led us to the 2008 catastrophe from which we still haven't recovered) and the decline of tax progressiveness and public services (which supercharged wealth inequality back to gilded age levels)?
Many of our current problems can be traced back to changes which occurred in the 70s and 80s.
Yes, prosperity on GDP numbers, blessed be Its name. Unfortunately not everything is reduced to making line go up.
When you deregulate stuff, the catastrophic results usually don't come immediately. If they were to come immediately, it would be blatantly obvious to everyone that it's a bad idea, and hence deregulation wouldn't happen. So, in practice, most of deregulation happens in areas where it's good for short-term and bad/catastrophic for long-term.
> High taxes always drive capital away into unproductive tax havens.
Citation needed. Show me data that demonstrates that use of tax havens is correlated to tax rates. The data over the last 30-40 years at least at first glance seems to disagree. Tax rates (in particular top income bracket, capital gains and corporate taxes) have continously reduced, while the amount of money in tax havens has increased.
Reagan's achievement was to eliminate tax shelters in exchange for lower tax rates. This pulled the investment out of those unproductive shelters into productive activities, leading to the prosperity of the 80s.