It is fact that the Reagan's 1986 tax reform act -- worked out with a democratic congress -- closed tons of loopholes, raised the corporate tax, and reduced individual taxe rates for all Americans, all while maintaining the same level of revenue. It much-simplified the tax process and was the most significant tax reform act of our generation. Yes the EIC was increased, but the cost was offset by eliminating other expenditures.
Also, from you own link:
- In the 1970s many tax subsidies were provided as business tax breaks and deductions, which higher-income taxpayers found more valuable. The 1986 tax reform significantly cut back on business preferences, particularly through removal of the investment credit.
- Nonbusiness tax expenditures-those reported on individual income tax returns that do not also benefit businesses-are higher in 2006 than in 1976 (figure shows sharp decline between 1985 and 1990, after Reagan Tax Reform, re-growth through Clinton years)
- Exclusions that exempt specific kinds of income from tax constitute a substantial share of tax expenditures. Many exclusions benefit a large percentage of the population, including much of the middle class. Between 1948 and 1982 exclusions doubled, from 12 percent of personal income to 24 percent, before falling off to 19 percent in 2004 (more evidence of historic, high rate of expenditures)