President John F. Kennedy would not be welcome in his own Democratic party if he were alive today.
Continue Reading Below
That’s because he was not a Miss Jane Hathaway, “you didn’t build that, government did” tax scold who thought Americans were “stupid,” as health reform architect Jonathan Gruber believes.
Kennedy campaigned on pro-growth income tax cuts. When elected, even though he inherited a recession, Kennedy continued to fight for tax cuts up until the day he was assassinated. On November 22, 1963, the president was on his way to deliver a speech at the Dallas Trade Mart in which he fought to let Americans keep more of what they earn via his tax cuts.
“We are strengthening our security as well as our economy by our recent record increases in national income and output -- by surging ahead of most of Western Europe in the rate of business expansion and the margin of corporate profits, by maintaining a more stable level of prices than almost any of our overseas competitors, and by cutting personal and corporate income taxes by some $11 billion, as I have proposed, to assure this nation of the longest and strongest expansion in our peacetime economic history.
“This nation's total output--which three years ago was at the $500 billion mark--will soon pass $600 billion, for a record rise of over $100 billion in three years. For the first time in history we have 70 million men and women at work. For the first time in history average factory earnings have exceeded $100 a week. For the first time in history corporation profits after taxes -- which have risen 43% in less than three years -- have an annual level of $27.4 billion.
“My friends and fellow citizens: I cite these facts and figures to make it clear that America today is stronger than ever before. We, in this country, in this generation, are -- by destiny rather than by choice -- the watchmen on the walls of world freedom.”
Continue Reading Below
In February 1964, President Lyndon Johnson signed into law Kennedy’s across-the-board tax cut, dropping the top income tax rate from 91% to a still nosebleed 70%; the bottom rate was cut from 20% to 14%; and corporate tax rates dropped to 48% from 52%. All of these tax cuts presaged Reagan’s supply side tax cuts.
The economy boomed, and the jobless rate dropped to levels not seen since the pre-Depression era. During the Eisenhower Administration, the economy grew at less than 2.5%, in many years just 2.1%, often tipping into recession. After the Kennedy cuts, the economy grew at 5.8% in 1964, 6.5% in 1965, and 6.6% in 1966.
Unemployment steadily dropped from 5.2% in 1964 to 4.5% in 1965 and 3.8% in 1966. Tax revenues came pouring in, according to the Treasury Department.
The bottom 85% of taxpayers enjoyed 59% of the benefits of JFK’s tax cut. The top 2.4% received 17.4% of the tax cut, and the top 0.4% received just 6% of it, according to the Joint Committee on Internal Revenue Taxation at the time.
Contrast that action to today, when a profound tolerance is upon the U.S., a tolerance so extensive, austere and disciplinary that it really is akin to a reign of terror.
This tolerance is as follows: Only government is the source of creation, only government can dispense growth via raising taxes to fund government spending, growth can only come through the neurotic workings of the U.S. tax and regulatory state.
It’s a tolerance that resulted in a complex, demoralizing, Swiss grandfather clock of a health reform law, which now Democrat Senator Chuck Schumer finally had the nerve to echo what many already said, that it should not have been the administration’s focus after the economic collapse, it should have focused on jobs and growth.
But obsessed with regulatory bric a brac, the Congress and the Administration turned a perverse bill loaded with taxes loose on the U.S. economy.
However, you cannot raise your voice in dissent against any thought or idea or from the Democrats, no matter how lunatic. Right now, the door to the Democrats’ faculty lounge is permanently shut to the irrelevant entrepreneur, as politicians apply their stern tolerance and their academic talents to construct regulatory mausoleums for the U.S. economy.
Never mind the defection of the public at the midterms, tired of the class warfare routine, tired of the anti-business, big tax harangues (President Obama said: To the “two thirds of voters” who didn’t vote, “I hear you, too.” Question: Does that mean we should ignore the 47% who voted for the president in 2012?)
Entrepreneurs must now bend to whatever is in service to the Dem’s conclusion, toe-stubbing on the tax and regulatory furniture along the way. Instead of feeling united by the spirit of exploring and building and inventing, entrepreneurs now battle to avoid being swallowed whole in the frozen, humorless sea of the party that knows better.
The bet of the Dems, voters are not thinking about what really creates income inequality, what can stop jobs dead in their tracks, the dead hand of government intervention. That upward income mobility between the tax brackets is a reality attainable by anyone who wants to work hard.
It’s not gridlock that’s the problem, it’s incumbency, with many politicians still holding office since the ‘70s disco era of hukapoo shirts and the Pacer. When just a decade earlier, the country heard this from John F. Kennedy:
“I am just as opposed as Mr. Nixon to unbalanced budgets and centralized government. I do not believe that Washington should do for the people what they can do for themselves through local and private effort. There is no magic attached to tax dollars that have been to Washington and back. No expert in the nation's capital knows as much about your local problems and how to meet them as you do. Big government is just as much a threat to our liberties as too little government.”—Campaign speech, October 1960
“The rights of man come not from the generosity of the state but from the hand of God.” —Inaugural address, January, 1961
“Every dollar released from taxation that is spent or invested will help create a new job and a new salary. And these new jobs and new salaries can create other jobs and other salaries and more customers and more growth for an expanding American economy. "—Radio address to the nation, August 1962
Here was President Kennedy in his address to the Economic Club of New York, December 1962:
“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 -- to cut the fetters which hold back private spending.
“If government is to retain the confidence of the people, it must not spend more than can be justified on grounds of national need or spent with maximum efficiency.
“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 -- 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.
“To increase demand and lift our economy, the federal government’s most useful role is..to expand the incentives and opportunities for private expenditures.”
“[I]t 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…….[A]n economy hampered by restrictive tax rates will never produce enough revenues to balance the budget, just as it will never create enough jobs or enough profits.”
Kennedy explained further that the best way to promote economic growth, “is to reduce the burden on private income and the deterrents to private initiative which are imposed by our present tax system – and this administration is pledged to an across-the-board reduction in personal and corporate income tax rates.”
Compared Kennedy’s approach to this:
“If you’ve been successful, you didn’t get there on your own. If you’ve got a business -- you didn’t build that.”—President Barack Obama
“Don’t let anybody tell you that, you know, it's corporations and businesses that create jobs.”—Hillary Clinton
“There is nobody in this country who got rich on his own — nobody."—Sen. Elizabeth Warren
“It’s a false argument to say that we have a spending problem.”—Rep. Nancy Pelosi
Tax cuts are spending: “But spending is also related to tax cuts, they are called tax expenditures, spending money on tax breaks.—Rep. Pelosi
“We don't have a spending problem, we're not broke.”--Sen. Tom Harkin
"We don't have an immediate crisis in terms of debt."--President Obama