|Source:Spectator 1828- Classical Liberal President John F. Kennedy|
First of all, I want to thank my friend and one of my subscribers Brendan Owens from Facebook for giving me the inspiration to write this blog post about tax cuts. Parts of the last two nights we've been debating tax cuts on Facebook as good friends can do in a respectful way. He's a self-described Democratic Socialist. I don't say that to be insulting, but thats how he describes his politics. I'm a self-described Liberal Democrat, so we have plenty to debate about outside of social issues, where we tend to agree. At least so far, we haven't discussed gun rights yet, but maybe in the future.
Jack Kennedy, a political hero of mine and I know I've said this many times, but it's definitely true. Inherited a recession, or a weak economy when he became President in 1961. The economy boomed for the most part in the 1950s under the Eisenhower Administration. But went into recession in I believe in 1958. It cost the Republican Party a bunch of seats in Congress that year. As Congressional Democrats added to their majorities, thanks to the Southern Conservative Caucus and others. And proposed an Economic Recovery Act that had I believe at the time the largest tax cut in American history.
Back then, we had tax rates ranging from 25-90%. Thank God for all of the tax deductions! Or our economy would be like Russia, with basically no property rights. Basically the Federal Government would take most of your money from you in income and payroll taxes and then let you decide how much of it you could get back in order to pay your bills. It was redistribution of your own wealth through high tax rates.
President Kennedy, recognized that those high tax rates were slowing down economic growth and economic incentive for people to work hard and make a good living. Because the Federal Government would collect so much of the money. Those high tax rates didn't make much sense even from a socialist point of view other than to hold down the rich or something. Because America still didn't have much of a safety net. This was right before the Great Society.
The 1960s, was one of the best decades we've ever had economically at least in the 20th Century. With high economic and job growth for most of that decade and low unemployment. One of the reasons why President Johnson was elected in a landslide in 1964 and if it wasn't for the Vietnam War, he probably would've been reelected in a landslide as well. The Kennedy tax cuts by the way: we ain't talking about Goldwater-Reagan or Kemp-Roth, but Jack Kennedy a Liberal Democrat, was a big part for the 1960s economic expansion. And it wasn't a supply side tax cut, but they paid for it by eliminating tax loopholes.
The Kennedy tax cuts, had tax reform in it. Lower tax rates while eliminating tax loopholes. Letting people keep more of their money for them to decide how to spend it. Encouraging people to be more productive, because they would get to keep more of their money as a result. Instead of the Federal Government taking most of it from them. The Kennedy tax cuts plus the Vietnam War with the boom in the military industry as well as people being sent to Vietnam opening up more jobs at home, are reasons for the economic expansion of the 1960s.