Stephen Colbert interviewed presidential candidate and Texas Sen. Ted Cruz on the CBS’ The Late Show.
Colbert asked Cruz if he could agree with then-President Ronald Reagan’s support of amnesty for undocumented immigrants and record of raising taxes amid budget shortfalls. Cruz said “of course not” before pivoting to Reagan’s most conservative accomplishments, one being that he “signed the largest tax cut in history” and spurred economic growth.
Colbert jumped in, saying, “But when conditions changed in the country, he reversed his world’s ‘largest tax cut’ and raised taxes when revenues did not match the expectations. So it’s a matter of compromising.”
The “largest tax cut in history” that Cruz mentioned is in reference to the Economic Recovery Tax Act of 1981, a $38 billion phased-in cut ($99 billion in 2015 dollars). Put in the way that economists prefer to discuss tax cuts, it represented 1.91 percent of the country’s gross domestic product.
As Colbert said, Reagan raised taxes, too. Two laws, one in 1982 and another in 1984, were especially dramatic.
In 1982: The most significant tax increase Reagan signed was also the first. The Tax Equity and Fiscal Responsibility Act of 1982. The 1982 law raised taxes by almost 1 percent of GDP, or about $150 billion in modern dollars.
In 1983: A law Reagan signed in 1983 aimed to keep Social Security afloat by increasing payroll taxes and taxing some Social Security. This cost $24.6 billion, or almost $50 billion in 2015 dollars, through 1988.
In 1984: The Deficit Reduction Act that Reagan signed rolled back part of the 1981 cut led to $25 billion in tax receipts. Legislation that Reagan signed over his time in office and raised taxes did not completely reverse the 1981 Economic Recovery Tax Act. But the broader point Colbert makes is on point. Reagan agreed to raise taxes to deal with budget deficits, even if he wasn’t enthusiastic about it.
Anarchy pharmaceutical pricing
Martin Shkreli, CEO of Turing Pharmaceuticals, the company that jacked up the cost of a life-saving drug from $13.50 to $750 essentially overnight, says the new price tag is still below market value compared with cancer and rare-disease drugs. Yet experts told us cancer and rare disease drugs are not Daraprim’s peers.
Daraprim’s patent expired more than six decades ago and is a niche generic drug.
Daraprim is used to treat a parasitic infection known as toxoplasmosis. About 60 million Americans carry the parasite with no symptoms, but it can become deadly for those with weakened immune systems. By Shkreli’s calculations, the new price of treatment is $75,000 (old $1,350)/100 pills.
But that’s a low estimate, according to the Infectious Disease Societies of America.
It estimated a new annual cost of $336,000 to $634,000, depending on dosage.
The proposed 5,000 percent price increase on Daraprim is indicative of a larger trend among more niche generic drugs. A joint House and Senate investigation, partly led by Democratic Presidential candidate Sen. Bernie Sanders of Vermont, found that the annual cost hikes for 10 generic drugs ranged from 390 to 8,200 percent.
This “anarchy pricing” can be attributed to the failure of the free market and a lack of government regulation, says Alan Sager, a professor of health policy and management at Boston University.
“Essentially, this is an example of where the drug pricing system for generic drugs has totally failed,” Anderson said. “In the past, generic drugs have prices that are low because of competition. Anyone can make it with FDA approval. The only thing you can compete on is price. Shkreli’s found something where there’s no competitors.”
Chip Tuthill is a longtime resident of Mancos. Website used for this column: www.politifact.com.