President John F. Kennedy, Early Supply Sider
Barack Obama, listen up!
In this video from August 13, 1962, when the highest marginal individual income tax rate was 91% and the highest marginal corporate tax was 52%, President John F. Kennedy announced his plan to introduce permanent, across-the-board tax cuts for both individuals and corporations. Kennedy argued that both "logic and equity" demanded tax relief for Americans, and that the dollars released from taxation would create new jobs, new salaries, and spur economic growth and an expanding American economy, thereby creating more tax revenues.
Kennedy's supply-side tax cuts were passed, and by 1964 the top personal tax rate was 77%, dropping to 70% in 1965. In 1965, the corporate tax rates were reduced to 22% and 48%, from previous rates of 30% and 52%. The Kennedy tax cuts did help expand the economy, resulting in a 106-month economic expansion during the 1960s, the longest expansion in U.S. history until the 120-month expansion from 1991-2001. Tax revenues grew by 65% from 1965 to 1970.
They sure don't make Democrats the way they used to.
19 Comments:
"Highest marginal individual income tax rate was 91%".
Are you serious?
Democrats: tax and spend
Supply siders: borrow and spend
Real conservatives/libertarians: cut spending, reduce/eliminate government
"Supply siders: borrow and spend"?!?!?
"Real conservatives/libertarians: cut spending, reduce/eliminate government"...
Yep!
Hmmm, would JFK be welcome in today's Democrat party?
...and brother Teddy, the "Swimmer", has spent 46years trying to turn the tide by raising taxes at every opportunity.
When it comes to taxes, we've come along way, baby.
I'm glad there is some reality being introduced to this site through the comments. Supply side economics is total voodoo. It is essentially mortgaging the future for today.
And ignoring the economic malaise that is quickly starting to escalate is just plain stupid. I love free markets, but we are so far from having anything remotely resembling them. The UM projection is going to be proven drastically wrong. Unemployment is accelerating to the downside as all the debt the supply siders happily loaded onto the economy for the past 2 decades is going to stunt growth for years.
Increasing debt works until it doesn't. You figure at George Mason they might've made you take a cursory glance at Hayek or Mises. Guess not.
Note that while nominal corporate tax rates haven't changed in a while, real corporate taxes have drastically increased. That's because the corporate income tax, unlike the personal, is not indexed to inflation, and the brackets haven't changed for over 30 years.
As they say about the current crop of Democrats - "This is not your father's Democratic party."
I've got news for you. JFK is dead and the 60's was a totally different era.
You better start listening to the smart people that are still in this world:
"Buffett cited himself, the third-richest person in the world, as an example. Last year, Buffett said, he was taxed at 17.7 percent on his taxable income of more than $46 million. His receptionist was taxed at about 30 percent."
http://www.washingtonpost.com/wp-dyn/content/article/2007/06/27/AR2007062700097.html
Buffet is a socialist. He wants to hit me and my heirs with higher taxes, and for that I scowl menacingly in his general direction. Of course he fails to mention his conflict of interest: estate taxes are the lever that gives him the opportunity to buy companies cheap, which is why he talks about wanting the estate tax to be as high as possible.
If he actually believes what he said in your quote, it proves he knows nothing about US tax law. If he doesn't, he's just a liar. Either way, I'm not listening to anything he has to say on the matter.
Anonymous 5:07,
Don't be fooled. What you mention is called "deferred compensation". And while you may not like it because it benefits the "rich" it helps the blue collar workers as well.
Just because Democrats, and Warren Buffet, use terms to fool you doesn't make it true. Didn't Buffet make those statements at a Democratic fundraiser? Did you see him go "my poor secretary" ..wink, wink.....? With one act of compassion he could make her a millionaire. No?
Deferred compensation, as a retirement option, means no taxes paid now, but, you will pay them later.
Who will be hurt more by ending deferred compensation: a billionaire or "employees of the state" participating in said plans?
And do you think reducing the tax rates will really make that big of a difference? It did back then when they dropped 20%+, but a cut of a percent or two will not have that much effect. I am all for lower tax rates, but when you are coming down from historic levels of course they will work. In today's environment, not so much.
Buffet is in a rare case that he pays most of his taxes as capital gains. But that rate isnt the real tax he pays, because capital gainst taxes tax nominal inventment gains not real gains adjusted for inflation. If i buy a stock at $5 and sell at $10 ten years later, but inlfation has caused the dollar to lose half its value, then i really havent made anything though ims till taxed on $5 "profit" adjusted for inflationt he average real capitla aginst tax is about 30 percent, not 15%. Also, capitla aginst are taxed at the corprate level by reducing corprate income thought corparet taxes whichr educes the real value of the underlying asset (the stock) and as a result reduces what would have been your capitl gain. So buffet in reality paid taxes much higher then the 17 percent you quote. Thats only the number he dirrectly wrote a check for.
> When it comes to taxes, we've come along way, baby.
Not as far as we think. They've just spread out the taxes into miscellaneous "license fees", and "usage fees" and other such folderol excuses for taxes.
Less taxes on the high end, sure, but probably more on the lower end (not to suggest I favor a reversion, mind you).
> I'm glad there is some reality being introduced to this site through the comments. Supply side economics is total voodoo. It is essentially mortgaging the future for today.
Spoken like a complete fool. Thanks for letting us know that there are always those who can't do simple math and think they can stress some numbers but ignore others... like the debt as a percentage of assets or GNP.
> for the past 2 decades is going to stunt growth for years.
So the Austrians have been whining for about a decade now, yet the economy -- wealth (total assets) as well as median income, both in constant dollars -- steadily increase in spite of their cries of impending doom.
> ... made you take a cursory glance at Hayek or Mises. Guess not.
Yes, I'm sure they don't pay them any attention at all. Or perhaps they see the same issue with Austrian economics I do, which is a failure to explain why the economy continues to grow despite the Austrian determination that it cannot possibly.
I think there are certainly elements to the Austrian scheme which work, mind you, but at the least it needs substantial adjustments to explain the last 10 years.
The Swartzberg Test:
The validity of a science is its ability to predict.
So far, Austrians fail that test. Not as badly as Keynesians, but still they fail.
> You better start listening to the smart people that are still in this world:
Yes, Buffet hasn't become an advisor for Obama for some reason that makes no sense at all -- Obama's policies are utterly socialist, and thus utterly at odds with the very thing that made Buffet wealthy in the first place.
As Dr. Perry noted a few months ago, if Buffet wanted to pay more taxes than his secretary, then there are mechanisms in place for it. To demand that others do so using the backing of government force is dishonest and disreputable.
Progressive tax brackets = socialism?
They don't make republicans like they used to either. As the Daily Show said, "liberals have to prove they love america. Everyone knows republicans love america, they just hate half the people living in it."
"Everyone knows republicans love america, they just hate half the people living in it"...
Yeah, especially the seditious, parasitic liberal half...
Just look at the danny comment and you know that secondary education has been a complete failure for quite some time now...
> Progressive tax brackets = socialism?
On some levels. There is merit to the argument that you can and should tax more on the excess above living expenses than the living expenses themselves. Not saying it's right, but it's not blatantly, inarguably wrong, either.
The problem is that, sooner or later, that drifts into bread and circuses, as the plebes realize that they outnumber the ones paying the majority of taxes, so they can implement more taxes against them to pay for special programs for them.
And therein lies the crux. The plebes are starting to realize their power to vote for bread and circusses
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