Starving the Beast

Ronald Reagan and the Tax Cut Revolution
Monica Prasad
6.00 x 9.00 in.
256 pages
November, 2018
ISBN: 978-0-87154-692-0

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“Monica Prasad begins with an unabashedly favorable view of European welfare states yet gives validity to conservative concerns over taxing production rather than consumption. Readers from all political suasions shouldn’t be deterred by whether they agree with theses like these. By reading Starving the Beast, they will garner much better understanding of the history, events, and forces surrounding the conversion of the Republican party to being the Santa Claus of tax cutting.”

—Eugene Steuerle, Institute Fellow and Richard B. Fisher Chair, The Urban Institute

“Republican commitment to tax cuts is one of most consequential and problematic features of modern American politics. Monica Prasad's fascinating book, Starving the Beast, offers a compelling new explanation of how this came to be.”

—Lane Kenworthy, professor of sociology and Yankelovich Chair in Social Thought University of California, San Diego

Since the Reagan Revolution of the early 1980s, Republicans have consistently championed tax cuts for individuals and businesses, regardless of whether the economy is booming or in recession or whether the federal budget is in surplus or deficit. In Starving the Beast, sociologist Monica Prasad uncovers the origins of the GOP’s relentless focus on tax cuts and shows how this is a uniquely American phenomenon.

Drawing on never-before seen archival documents, Prasad traces the history of the 1981 tax cut—the famous “supply side” tax cut, which became the cornerstone for the next several decades of Republican domestic economic policy. She demonstrates that the main impetus behind this tax cut was not business group pressure, racial animus, or a belief that tax cuts would pay for themselves. Rather, the tax cut emerged because Republicans believed that following World War II, Democrats had created an extremely durable power structure based on offering government programs to Americans, through which they were able to unify an otherwise fractious coalition of farmers, workers, and African Americans and retain control of Congress for four decades. Republicans were reduced to lecturing about balanced budgets, an issue that did not win them many elections.

The Republican party began to see tax cuts as an opportunity to alter these basic building blocks of American power. If Democratic power was built out of government programs, Republicans found a new power source in offering tax cuts. Once it became clear that the resulting deficits could be financed by foreign capital, this program reoriented the Republican Party, transforming it from the party of fiscal rectitude into a party whose main domestic policy goal is reducing taxes. With one party promoting government programs to appeal to voters and the other party promoting tax cuts to appeal to voters, and neither party able to generate electoral coalitions around addressing more pressing political and economic problems, this history reveals problems at the heart of contemporary American democracy itself.

Prasad suggests some ways forward. Since the end of World War II, many European nations have combined strong social protections with policies to stimulate economic growth such as lower taxes on capital and less regulation on businesses than in the U.S. Starving the Beast suggests that taking inspiration from this model of progressive policies embedded in market-promoting political economy could serve to build an American economy that works better for all.

MONICA PRASAD is professor of sociology and faculty fellow in the Institute for Policy Research at Northwestern University.


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