http://www.mtgriffith.com/web_documents/taxcutmyths.htm
MYTH: JFKâs tax cuts were more responsible than Reaganâs or Bushâs. They were aimed at the middle class and didnât help the rich.
FACT: JFK cut taxes more than Reagan did. JFKâs tax cut was larger than the Reagan tax cuts and any single Bush tax cut compared with national income, and it was larger than all three Bush tax cuts combined in relation to the federal budget. In addition, JFK gave a huge tax cut to the rich.
The Tax Foundation:
Contrasting the size of the tax cuts with national income shows that the Kennedy tax cut, representing 1.9 percent of income, was the single largest first-year tax-cut of the post-WW II era. The Reagan tax cuts represented 1.4 percent of income while none of the Bush tax cut even breaks 1 percent of income. The Kennedy tax cuts would only have been surpassed in size by combining all three Bush tax cuts into a single package.
Comparing the size of these tax cuts with the federal budget shows that the Kennedyâs tax cuts represented 8.8 percent of the budget. In 1981, Reaganâs tax cuts represented 5.3 percent of the budget. Each of Bushâs tax cuts are smaller than ReaganâsâEGTRRA (3.8 percent), JCWA (2.5 percent) and the 2003 Tax Cut (1.8 percent). When the Bush tax cuts are combined (8.1 percent), they would be larger than Reaganâs tax cut, yet smaller than Kennedyâs tax cut. ("Fiscal Facts," Tax Foundation,
http://www.taxfoundation.org/news/show/323.html)
Jeff Jacoby:
By any rational yardstick, the Kennedy tax cut was enormous, and it was a boon to the rich. It cut the top marginal rate a whopping 21 percentage points, from 91 to 70. Bush's plan lowers rates at the top by only 6.6 percentage points. For those in the lowest bracket, JFK cut the tax rate to 14 percent. . . . (
http://www.jewishworldreview.com/jeff/jacoby031601.asp)
MYTH: Lower tax rates donât cause economic growth.
FACT: Even JFK understood that lower tax rates produce economic growth and even higher tax revenue. According to President Kennedy:
Our true choice is not between tax reduction, on the one hand, and the avoidance of large federal deficits on the other. It is increasingly clear that no matter what party is in power, so long as our national security needs keep rising, an economy hampered by restrictive tax rates will never produce enough revenues to balance our budget â just as it will never produce enough jobs or enough profits. Surely the lesson of the last decade is that budget deficits are not caused by wild-eyed spenders but by slow economic growth and periodic recessions, and any new recession would break all deficit records.
In short, it is a paradoxical truth that tax rates are too high today and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now. The experience of a number of European countries and Japan have borne this out. This country's own experience with tax reduction in 1954 has borne this out. And the reason is that only full employment can balance the budget, and tax reduction can pave the way to that employment. The purpose of cutting taxes now is not to incur a budget deficit, but to achieve the more prosperous, expanding economy which can bring a budget surplus. (
http://www.americanrhetoric.com/speeches/jfkeconomicclubaddress.html)
Dr. Daniel Mitchell:
There is a distinct pattern throughout American history: When tax rates are reduced, the economyâs growth rate improves and living standards increase. Good tax policy has a number of interesting side effects. For instance, history tells us that tax revenues grow and ârichâ taxpayers pay more tax when marginal tax rates are slashed. This means lower income citizens bear a lower share of the tax burden â a consequence that should lead class-warfare politicians to support lower tax rates. . . .
Recognizing that high tax rates were hindering the economy, President Kennedy proposed across-the-board tax rate reductions that reduced the top tax rate from more than 90 percent down to 70 percent. What happened? Tax revenues climbed from $94 billion in 1961 to $153 billion in 1968, an increase of 62 percent (33 percent after adjusting for inflation). (
http://www.heritage.org/research/taxes/wm327.cfm)
MYTH: Government borrowing and spending spurs economic growth.
FACT: JFK rejected the idea that we can borrow and spend our way out of tough economic times. Instead, he argued for tax cuts, including corporate tax cuts:
But the most direct and significant kind of federal action aiding economic growth is to make possible an increase in private consumption and investment demand â to cut the fetters which hold back private spending. In the past, this could be done in part by the increased use of credit and monetary tools, but our balance of payments situation today places limits on our use of those tools for expansion. It could also be done by increasing federal expenditures more rapidly than necessary, but such a course would soon demoralize both the government and our economy. . . .
The final and best means of strengthening demand among consumers and business is to reduce the burden on private income and the deterrents to private initiative which are imposed by our present tax system â and this administration pledged itself last summer to an across-the-board, top-to-bottom cut in personal and corporate income taxes to be enacted and become effective in 1963. . . .
Corporate tax rates must also be cut to increase incentives and the availability of investment capital. The government has already taken major steps this year to reduce business tax liability and to stimulate the modernization, replacement, and expansion of our productive plant and equipment. (
http://www.americanrhetoric.com/speeches/jfkeconomicclubaddress.html)
Itâs also worth noting that when John F. Kennedy served in Congress as a Representative and later as a Senator, he voted for an across-the-board cut in federal spending in 1950, for raising the annual personal income tax excmption by a whopping 16.5% in 1954, for a $6 billion dollar tax cut in 1958, for reducing taxes on small corporations in 1958, and spoke out against raising taxes on rural electric cooperatives in 1960.
