"So...we just IMAGINED it, rich people earned it all, and almost everything is actually great?"
Not at all. I think income inequality is unmanageable, and the Reagan package probably contributed to an increase in income inequality that has continued upward on about the same slope line since 1968. The increase in inequality isnt pretty, but it's continued unabated from POTUS to POTUS, regardless of party or changes in taxation during that time.
However, the common belief, as I point out in my response, is that Reagan lowered taxes on the rich, making them richer. That narrative is false. The truth is that Reagan lowered marginal rates but not effective rates, BUT because the rich no longer had to engage in government-certified tax leveraged investments to lower their effective rates, that money went flying into the stock market and real estate, driving up asset prices.
Now, was that a good move, to lower marginal rates and remove the tax shelters? Well, it was one of the rare areas of agreement, at the time, between liberal and conservative economists, that the tax-leveraged plan with high marginal rates was inefficient.
Hope that helps.
