John F. Kennedy on taxes

Sticking with the issues...maybe Obama should heed the advice of JFK.

Note: The following quotes are published in the book, "The Interesting History of Income Tax," by William J. Federer (Amerisearch, Inc., P.O. Box 20163, St. Louis, MO 63123, 1-888-USA-WORD)

"It is a paradoxical truth that tax rates are too high and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now ... Cutting taxes now is not to incur a budget deficit, but to achieve the more prosperous, expanding economy which can bring a budget surplus."
– John F. Kennedy, Nov. 20, 1962, president's news conference
--------------------------------------------------------------------------------
"Lower rates of taxation will stimulate economic activity and so raise the levels of personal and corporate income as to yield within a few years an increased – not a reduced – flow of revenues to the federal government."
– John F. Kennedy, Jan. 17, 1963, annual budget message to the Congress, fiscal year 1964
--------------------------------------------------------------------------------
"In today's economy, fiscal prudence and responsibility call for tax reduction even if it temporarily enlarges the federal deficit – why reducing taxes is the best way open to us to increase revenues."
– John F. Kennedy, Jan. 21, 1963, annual message to the Congress: "The Economic Report Of The President"
--------------------------------------------------------------------------------
"It is no contradiction – the most important single thing we can do to stimulate investment in today's economy is to raise consumption by major reduction of individual income tax rates."
– John F. Kennedy, Jan. 21, 1963, annual message to the Congress: "The Economic Report Of The President"
--------------------------------------------------------------------------------
"Our tax system still siphons out of the private economy too large a share of personal and business purchasing power and reduces the incentive for risk, investment and effort – thereby aborting our recoveries and stifling our national growth rate."
– John F. Kennedy, Jan. 24, 1963, message to Congress on tax reduction and reform, House Doc. 43, 88th Congress, 1st Session.
--------------------------------------------------------------------------------
"A tax cut means higher family income and higher business profits and a balanced federal budget. Every taxpayer and his family will have more money left over after taxes for a new car, a new home, new conveniences, education and investment. Every businessman can keep a higher percentage of his profits in his cash register or put it to work expanding or improving his business, and as the national income grows, the federal government will ultimately end up with more revenues."
– John F. Kennedy, Sept. 18, 1963, radio and television address to the nation on tax-reduction bill

Your rating: None Average: 5 (6 votes)

Obama's tax cuts will be larger for a larger number of Americans, than McCain's cuts. Here's an interesting article on Kennedy's tax cuts:

So, was Kennedy really a forerunner to Reagan and Bush? Or are supply-siders just cynically appropriating his aura? The Republicans are right, up to a point. Kennedy did push tax cuts, and his plan, which passed in February 1964, three months after his death, did help spur economic growth. But they're wrong to see the tax reduction as a supply-side cut, like Reagan's and Bush's; it was a demand-side cut. "The Revenue Act of 1964 was aimed at the demand, rather than the supply, side of the economy," said Arthur Okun, one of Kennedy's economic advisers.

This distinction, taught in Economics 101, seldom makes it into the Washington sound-bite wars. A demand-side cut rests on the Keynesian theory that public consumption spurs economic activity. Government puts money in people's hands, as a temporary measure, so that they'll spend it. A supply-side cut sees business investment as the key to growth. Government gives money to businesses and wealthy individuals to invest, ultimately benefiting all Americans. Back in the early 1960s, tax cutting was as contentious as it is today, but it was liberal demand-siders who were calling for the cuts and generating the controversy.

People like Pink Slip

Pink Slip

Another important thing to consider is the extremely high level of tax rates when Kennedy became President. The top rate for individual taxes (under Republican President Eisenhower, by the way) was 90%. That's right...90%. Cutting individual taxes when the rates are so high obviously has a greater stimulus to the economy than when rates have been lowered as much as they have in the last 25 years, whether that cut is aimed at supply (investment) or demand (consumption). Kennedy also asked Congress to cut the corporate tax rate from 52% to 48% to stimulate investment.

Since the Kennedy years, the United States has tried both types of tax cuts. Both work to a certain extent, but from the experiences of the Kennedy, Reagan/Bush #41, Clinton, and Bush#43 tax packages, it seems transparently clear that the Democratic emphasis on the demand side cuts works better.

Remember, not only did Clinton balance his last three budgets, with significant surpluses in his last two budgets, but the last previous balanced budget was the last one overseen by Democrat Lyndon Johnson way back in 1969. And that was in the middle of the Vietnam War!!

All modern neo-Con Republicans know how to do with the economy is to give the largest tax breaks to the wealthiest Americans and giant corporations, then borrow and spend, and send the bill to future generations.

KrazyKat---as dalepertcheck so deftly points out, the top individual rate back then was 90%. It was cut to 70%. So are you saying Obama should follow JFK's lead, and make the top rate 70% again?? Wow, good call. Here is some empirical evidence to the benefits of Kennedy/Obama DEMAND-side cuts vs Reagan/Bush/McCain supply-side cuts:
(the demand-side cuts were in 1993. the supply-side cuts were in 1981 and 2001)

- Real investment growth after the tax increases of 1993 was much higher than after the tax cuts of 1981 and 2001.

- Economic growth as measured by real U.S. gross domestic product was stronger following the tax increases of 1993 than in the two supply-side eras. Over the seven-year periods after each legislative action, average annual growth was 3.9 percent following 1993, 3.5 percent following 1981, and 2.5 percent following 2001.

- Wage levels also did better after 1993. Average real hourly earnings following 1981 fell at an annual rate of 0.1 percent and following 2001 rose at a rate of only 0.3 percent. Following the 1993 tax increases average hourly earnings grew by 0.9 percent per year.

- Employment growth was weaker during the supply-side eras than during the post-1993 era. Average annual employment growth was 2.1 percent after 1981, 2.5 percent after 1993, and 0.6 percent after 2001. (source)

People like Pink Slip

Pink Slip

Of course, the real purpose for these irresponsible tax cuts that McCain wants to continue, is to drain our treasury to necessitate the need to eventually cut social programs that the reich-wing hates. Tax cuts will not do this alone. We will need more wars. Don't worry, McCain will deliver. So the question voters need to answer is this:

WAR or MEDICARE?

People like Pink Slip

Pink Slip

like the the tax breaks Obama wants to give to 95% of the population when 40% already pay 0 (zero). This amounts to a tax rebate (not a tax break) for those who pay nothing to begin with. In other words welfare to those who shrug their responsibilities to care for themselve by becomming educated, getting a job and becomming productive members of society instead of a burden on the rest of us, acting like a sponge, and living with the attitude of "Why do I need to get a job? I will just live off Govenment handouts and spend Other Peoples Money". Redistribution of wealth..Socialism. Welcome to the United Socialist States of America! The USSA.

- Just the KAT, thinking out loud again.

If man has no tea in him, he is incapable of understanding truth. ~Japanese Proverb

KK--I could just as easily say all of those things about any Republicrat candidate. Just substitute the word "corporate" in front of "welfare". McCain--the corporate socialist. How many billions of taxpayer money is he willing to give the oil companies?

People like Pink Slip

Pink Slip

The neo-Cons use the term Socialism as if it is some form of profanity. You try to end every economic argument against one of your icons, like Bush #43, or Cheney, or Palin, by claiming that any progressive economic program is Socialist. This presumes that there is no value in any Socialist program whatsoever.

The fact is that nearly pure Socialism, as practiced in the former Soviet Union under Stalin, Khruschev, and Breshnev, as well as in China during the Maoist era, simply did not work. But the same is true of the nearly pure Capitalism we had before the Great Depression of the 1930s. That's the main reason we HAD the Great Depression of the 1930s!! When I was young, many adults told me that during the Great Depression, things were so bad that they thought that the United States might have a revolution, maybe even a Communist revolution! Franklin Roosevelt's New Deal gave people hope, and squashed the talk of revolution.

The United States learned that adding some government programs and regulations to our economic system evened out economic highs and lows. The Soviet Union dissolved because of its own economic failures. But China learned from them. While maintaining strong political controls over its citizens, China loosened the economic reins and allowed individuals to profit from their own hard work and initiative. China has recently passed Mexico as America's second biggest trading partner, and we all know who is buying more from whom!!

All industrialized nations in the world have a mix of both Socialism and Capitalism. So, is it any form of Socialism that is unsuccessful? Or is it the Marixist-inspired political dictatorship with rigid control of both political and economic freedom that is a failure? I say Marxist dictatorship and rigidity is at fault, not everything that is Socialist. And I have proof!

If social programs truly erode the U.S. economy, explain this. On the web site Nationmaster.com, I got the following information about per capita Gross Domestic Product, the best single measure of a nation's wealth. In 1993, after 12 years of leadership from Reagan and Bush #41, the United States stood 9th in the world in per capita GDP. In 2001, after 8 years of Bill Clinton's leadership, the United States stood 4th. In 2005, the last year for which they had complete statistics, after 4 years of Bush #43, the U.S. had slid back to #8. Ahead of the United States in 2005 were: Luxembourg, Norway, Iceland, Qatar, Switzerland, Ireland, and Denmark. Except for tiny Qatar, which sits on sands hiding huge fossil fuel reserves, what do all of the other nations ranking higher than the United States have in common? They all have national health care, and many other social programs that the United States can't pass through Congress because the neo-Cons raise that ugly specter of Socialism, Socialism!! Of course, concurrent with the neo-Con attacks, we have the giant corporations which give enormous donations to favored congressional candidates. This cowers members of Congress into non-action.

And if you still don't believe that more (NOT PURE) Socialism is a good thing for a nation, how has the U.S. dollar done compared to the Euro, used in all of those (GASP) Socialist nations of Western Europe, in the last few years? The weak dollar and the strong Euro are yet another indication of the relative strength of the two economic sectors, the United States and Western Europe.

The lesson here is that the United States can do more social programs, especially national health care, and not hurt our economy. In fact, well run social programs help the economy. Don't take my word for it. Ask someone from Luxembourg or Denmark!

I don't think I have read ANYWHERE that nationalized healthcare, welfare, food stamps or free housing is based on law.

I've looked in the U.S. Constitution and can't find references ANYWHERE to taking money from one group of people and giving it to another.

Can someone help me out with this? It appears that "Social Programs" are not based on law, but on morality.
http://www.ontheissues.org/Archive/Dem_Platform_2004_Welfare_+_Poverty.htm

Don't blame me,
I didn't vote for a
socialist.

I know that you love documentation, so here goes. "Article I -- Legislative Branch -- Section 8 -- Powers Granted to Congress -- Clause 18. To make all laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested by this constitution in the government of the United States, or in any department or office thereof." This is often called the "elastic clause" by scholars, and it was purposely written to allow for new circumstances as times changed.

As Thomas Jefferson said in 1816, "I know also that laws and institutions must go hand in hand with the progress of the human mind...As new discoveries are made, new truths disclosed, and manners and opinions change with the change of circumstances, institutions must advance also and keep pace with the times. We might as well require a man to wear the coat that fitted him as a boy,as civilized society to remain ever under the regimen of their barbarous ancestors."

Blow...you admit that these are "moral decision[s]". Try to be as modern as a man who lived 200 years ago! The social programs which work, we should have. Those that don't work, we should end. Remember, and I know that this fact is hard for neo-Cons to accept, it was Bill Clinton who proposed to Congress that we end welfare as a way of life in this country and put a limit on how many years any able-bodied and able-minded American could be on welfare. Congress went along. The old welfare system didn't work, so we got rid of it.

If European countries and Japan, which have similar or higher per capita GDPs to that of the United States are not being hurt economically by national health care systems, why should we not have such a system here? I could even make the argument that the other countries having national health care systems have international businesses that have an advantage over American companies because their national health care systems cost less per capita than does our national health care insurance system.

We have a national health care system, all right. It is administered, run, and controlled ever more tightly by giant insurance corporations. Ask a physician if (s)he can make all the health care decisions (s)he wants to make without interference? Often it is insurance bureaucrats who decide if you or I qualify for a life saving or life altering procedure. Some of these insurance bureaucrats have little experience in the medical field, and they tell doctors what they can and cannot do every day. You may be comfortable with this system, but I'm not!!

You neo-Cons have little or no faith in an elected government, but almost unlimited confidence in giant international corporations. We can affect government through elections. How, exactly do we get the "Blues", Aetna, Kaiser, and the other insurance giants to work for us?

The United States suffered through nine depressions prior to the "Great Depression". We emerged from them all within two years with little or no government intervention.

Along comes FDR and it takes 12 years and a world war to bring us out of that depression.

I'm not anti-New Deal. The New Deal brought about reforms that were necessary to save capitalism from its own excesses and FDR may have saved capitalism in the United States with the New Deal.

But to link FDR to a sound economic policy that saved us from the Great Depression is not historically accurate.

The depressions that occurred before 1929 happened in a primarily rural America. By 1920, the number of Americans living in urban areas surpassed the number living in rural areas for the first time.

In previous depressions, most Americans were farmers. Most American farmers could raise enough food to feed their families and help out at least some of their neighbors. By the 1930s, this was no longer the case.

Get your facts straight!! Herbert Hoover had over THREE YEARS to deal with the Depression before FDR came into office. Since Hoover espoused the free market philosophy you obviously embrace, and since Hoover did not create a slew of new government programs, what happened to your vaunted "two year recovery"?? By the way, just like John McCain today, Herbert Hoover kept telling the nation that the economy was fundamentally sound!!

You do have a LOT of nerve!! It's very easy for you to talk about the Great Depression as if it was no big deal; not much different than any other economic disturbance in our history. I assume that you are quite a young man. I could be wrong. We wring our hands when the unemployment rate creeps over 6%. Do you realize that the unemployment rate under Hoover peaked at nearly 25%!! And that was in a time when most families only had one parent working outside the home. Most moms were stay-at-home moms in those days. You are SO out of touch and out of your league in this debate!!

No, I am not old enough to have experienced the Great Depression. But there is a reason why it is called the GREAT Depression!! My mother and her sister stood in bread lines to bring bread home to their widowed mother and their younger brother. They were living guinea pigs in Hoover's experiment to, basically, do nothing, as you would advise, and wait for the 2 year cycle to pass. It did not! You go to the nursing home where my mother now lives and tell her to her face how FDR didn't really do anything to help out her family! I think you'll get an argument from her, even today!

http://www.nytimes.com/2008/08/13/business/13tax.html

Study Tallies Corporations Not Paying Income Tax

Two out of every three United States corporations paid no federal income taxes from 1998 through 2005, according to a report released Tuesday by the Government Accountability Office, the investigative arm of Congress.

The study, which is likely to add to a growing debate among politicians and policy experts over the contribution of businesses to Treasury coffers, did not identify the corporations or analyze why they had paid no taxes. It also did not say whether they had been operating properly within the tax code or illegally evading it.

First, I am an American so I don't care what European countries and Japan do with their money.

It is interesting that you should quote a founding father, because here is what they said specifically about welfare and the poor.

Congress has not unlimited powers to provide for the general welfare but only those specifically enumerated."
-- Thomas Jefferson

" I am for doing good to the poor, but I differ in opinion of the means. I think the best way of doing good to the poor, is not making them easy in poverty, but leading or driving them out of it."
-- Benjamin Franklin, On the Price of Corn and Management of the Poor, November 1776

"A government big enough to give you everything you want is big enough to take away everything you have."
--Thomas Jefferson

"To take from one, because it is thought his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, the guarantee to everyone the free exercise of his industry and the fruits acquired by it."-- Thomas Jefferson

The last quote from Thomas Jefferson graphically illustrates HIS stand on transferring money to the poor via nationalized healthcare, welfare, food stamps or free housing

So apparently, even 200 years ago, the Founding Fathers did not advocate nationalized healthcare, welfare, food stamps or free housing.

So, once again, are these moral decisions imposed on taxpayers by a Congress gone wild?

Don't blame me,
I didn't vote for a
socialist.

Obviously, you choose to ignore anything that shows your positions to be, at the least, arguable. Above I quote Jefferson's reference to tying current generations to the out of date notions of the past. Go back to the 19th Century! That's where your positions belong.

You also conveniently ignore the fact that it was Bill Clinton who led the nation to end welfare as a way of life for the able bodied and able minded. No Republican President had the guts to do this! Don't you dare suggest that Progressives favor laziness!

OH NO!! You don't want to be like Europe. That would be terrible!! You can't stand the fact that these countries are succeeding economically using policies that you despise! You ignore the facts that other countries are surpassing the United States because of programs like national health care. The fact is that a healthier America will be a more productive America. This is true in those nations with both national health care and stronger economies. PLEASE!! Don't ever let facts stand in the way of your idelogy!!

Yes! This is a 20th and 21st Century notion!! Health care is just as much of a human right as the right to have access to clean water and to breath clean air. And a national health care system will save money and make American companies more competitive in the world economy. It's a win-win proposal.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.