Of course tax revenues increased. They nearly doubled. Government did not shrink, it grew. Since Reagan took office in the post 1974 era, he also had to deal with baseline budgeting and the CBO. As I recall, the CBO projected his economic plan (including the tax increases) to be fairly revenue neutral,
I'm beginning to think Ron White was correct when he said "You can't fix stupid." Although in your case it may just be stubborn. Sure tax revenues increased rapidly as the economy recovered. But they increased faster than the recovery and at the end of Reagan's term, taxes as a percent of GDP were higher than at the beginning of his term, and higher than the 40-year moving average. That is a tax increase, no matter how you slice it.
Regarding the "revenue neutral" intention, that appears to have been pure marketing fluff to disguise the tax increase that was required to cover the increasing costs of running Reagan's government programs.
Sen. Bob Dole of Kansas — then chairman of the Finance Committee and later the majority leader and Republican nominee for president — was a driving force behind a big tax increase because he was concerned about soaring deficits after Reagan had boosted defense spending and slashed taxes.
Dole warned the White House that the final year of Reagan’s three-year tax cut was at risk unless revenue could be raised in other ways. Under Dole’s leadership, the Senate Finance Committee led the way in crafting a big tax bill, fending off efforts by Democrats to halt Reagan’s tax cut.
Key people on Reagan’s team — especially budget director David Stockman and White House Chief of Staff James A. Baker III — were eager to rein in the deficit.
As president, Reagan “raised taxes in seven of his eight years in office,” including four times in just two years. As former GOP Senator Alan Simpson, who called Reagan “a dear friend,” told NPR, “Ronald Reagan raised taxes 11 times in his administration — I was there.” “Reagan was never afraid to raise taxes,” said historian Douglas Brinkley, who edited Reagan’s memoir. Reagan the anti-tax zealot is “false mythology,” Brinkley said.
