So Now You’re Jack Kennedy?
One of my favorite parts of the Oct 11 VP debate appears in the first 27 seconds of the composite video below. In that segment, Joe Biden categorically rejects the (Laffer Curve) notion that tax cuts could ever increase revenue to the government, and he ignorantly dismisses the claim that they ever have.
Biden then boorishly mocks Paul Ryan’s reference to John F. Kennedy’s 1962 tax cut initiative with his sure-to-be-remembered, bone-headed non-sequitur “So Now You’re Jack Kennedy?”. This was all classic Joe Biden, who is sounding increasingly like a parody of himself.
The rest of the 2-minute video below (made by the Winston Group in 2010) supports Ryan’s point and refutes Biden’s ignorant assertions by interspersing modern-day questions with comments from JFK’s 1962 presentation to the Economic Club of New York. Kennedy’s full speech is available at this link.
Almost exactly 50 years ago, President Kennedy sought to boost government revenue, reduce national debt, and spur employment through a series of tax cuts. Then, as now, it was counterintuitive to think that tax cuts could actually increase tax revenue. It was also counterintuitive when it was done in the Coolidge, Reagan, and Bush 43 administrations. But it worked in all four cases. The IRS actually gleaned more — repeat, more — total tax revenue from people in the highest income brackets than before the cuts.
How can this be so? As Thomas Sowell has written:
[It is] because high-income people took their money out of tax shelters like municipal bonds and invested where they could get a higher rate of return, after these returns were not being taxed as much. This has happened repeatedly, over so many decades, in administrations of both parties, that you might think this would put an end to the “tax cuts for the rich” demagoguery.
But high-tax ideologues don’t see it that way. They would be horrified at the idea that we ought to lower our corporate tax rates, just so that more American businesses would do more of their business at home, providing more Americans with much-needed jobs.
The time is long overdue to start thinking about taxes as sources of revenue, not as ways of making political statements.
It is indeed long overdue, Dr. Sowell, but it hasn’t made dent in Big-Government Democrat or Big-Government Republican thinking.
Why? As you yourself point out:
Someone once said that taxes are the price we pay for civilization. That may have been true when he said it, but today taxes are mostly the price we pay so that politicians can play Santa Claus and get reelected.