[191] The breaking of the PATCO strike demoralized organized labor, and the number of strikes fell greatly in the 1980s.[190] With the assent of Reagan's sympathetic National Labor Relations Board appointees, many companies also won wage and benefit cutbacks from unions, especially in the manufacturing sector.[192] During Reagan's presidency, the share of employees who were part of a labor union dropped from approximately one-fourth of the total workforce to approximately one-sixth of the total workforce.[193]

"Reaganomics" and the economy
Main article: Reaganomics
Taxation
Reagan outlining his plan for tax cuts, July 1981
Reagan advocated a laissez-faire philosophy,[194] and promoted a set of neoliberal reforms dubbed "Reaganomics", which included monetarism and supply-side economics.[195][196] In 1981, he lifted federal oil and gasoline price controls[197] and signed the Economic Recovery Tax Act of 1981[198] to dramatically lower federal income tax rates and require exemptions and brackets to be indexed for inflation starting in 1985.[199] The Tax Reform Act of 1986 reduced the number of tax brackets and top tax rate, and almost doubled personal exemptions.