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Reagan-style economic growth requires tax cuts, Sen. Ted Cruz argues

  • Reagan-style economic growth will require tax cuts, Sen. Ted Cruz says.
  • Cruz also says that under Reagan, the wealthy paid a higher percentage of taxes. "The working men and women did much better because we cut taxes and had economic growth," he says.
Ted Cruz
David Orrell | CNBC
Ted Cruz

Ronald Reagan-style economic growth will require tax cuts, Sen. Ted Cruz told CNBC on Friday.

"What happened in 1981 — Reagan came in. We saw major tax cuts. We saw, again, major tax reform in 1986, and the economy exploded," the Texas Republican told "Squawk Box."

Cruz also argued that under President Reagan the wealthy paid a higher percentage of taxes. "The working men and women did much better because we cut taxes and had economic growth," he added.

Supporters of the Reagan tax cuts point to the stronger economic growth that followed after years of stagnation during the previous administration. But opponents said the tax cuts lead to much higher deficits.

The GOP unveiled its blueprint for tax reform last month, calling for cutting personal and corporate tax rates, while aiming to simplify the U.S. tax code.

Chief White House economic advisor Gary Cohn has said the plan will be paid for entirely through economic growth. President Donald Trump has predicted his policies, including tax reform, would spur growth of 3 percent.

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