Thursday, January 4, 2007, 08:12 PM -
Satire
"The final and best means of strengthening demand among consumers and business is to reduce the burden on private income and deterrents to private initiative, which are imposed by our present tax system..." -John F. Kennedy Dec. 1962
The Left does not seem capable of coming to grips with the benefits of tax cuts, including reducing the cost of capital to business. One former president, however, understood perfectly.
The individual income tax cuts proposed by JFK took place, after his assassination. While JFK lived, however, and against the advice of many economic advisers, he enacted measures to lower the cost of capital, including an Investment Tax Credit for business, an easing of depreciation costs and an eventual lowering of corporate tax rates, from 52 to 48%.
JFK'S Tax Cuts For Individuals were, and "should be" as he said in a 1962 speech to the New York Economic Club, "across the board, top to bottom." In other words, no class warfare, even though the "reduction in payments" were far more advantageous to the rich under JFK, than those of President Bush.
Between 1952 and 1959, prior to JFK'S cuts, government revenue increased 1.2 percent a year.
From 1962 to 1969, after the cuts, government revenues increased 6.4 percent a year. The deficit fell from a high of $7.1 billion to $1.4 billion.
In 1981, Ronald Reagan inherited one of the worst economies the country has ever seen; an economy that might have been on the verge of collapse.
Reagan's Tax cuts, gave us the longest peacetime expansion in history up to that time. Like JFK'S cuts, there were no great secrets to President Reagan's cuts. A 25 percent across the board tax cut, for individuals, measures to reduce the cost of capital for business and under Paul Volcker's strong and steady hand at the Federal Reserve, the money supply was kept in check, bringing runaway inflation under control
During Reagan's presidency, real growth averaged 3.2%, a very strong eight year figure, when factoring in a serious recession of the early 80's. Real median family income increased by $4000.
Census Bureau data reveals Blacks and Hispanics made huge strides, the former moving 1/3 of families into the middle class.
IRS tax returns show that of those taxpayers, that started out in the lowest 20% at the beginning of the Reagan era, over half were in the top 20% at the end. The percentage of income taxes paid by the top 1% was 17.58% in President Reagan's first full year in office. In his last full year in office, the top 1% paid 27.58%. So lower tax rates worked to "soak the rich."
Still these gains did not thwart the leftist class warfare media and leftist agenda from creative accounting to turn the Reagan-Era positives into negatives. During the Reagan years, it was common to see shopping center businesses with signs everywhere that read Help Wanted, No Experience Necessary, Immediate Benefits and yet the media then and some still, use the moronic statement, that Ronald Reagan "nearly destroyed the middle class."
Now under George Bush, revenues have broken records for two successive years, 7 million new jobs have been created, unemployment is lower than the average of the last 30 years, the deficit has been cut in half, despite 9-11, the Iraq War and Hurricane Katrina.
Wages, even though they lagged temporarily, have had solid gains for the last two years. Incidentally a lag in wage gains is the norm. The average wage increase for non-supervisory employees in the last year is 2.8%. Adjusted for inflation that is almost $1200 per typical household and follows a 1.2% increase of the previous year.
Once again the lower rates are "soaking the rich." Latest IRS data shows that in 2002, before the final tax cuts, the share of the total income tax burden paid by the top 1 % was 33.71%. In 2004 the top 1% paid 36.89%.
Unfortunately, the benefits of tax cuts are always overwhelmed by excessive spending.
If you want your earnings to be much higher than they are for doing exactly what you are now doing, lower taxes and less government spending will get you there.
By: Mick McNesby
Mick McNesby is a former tax advisor, consultant and negotiator. He was a frequent guest on political talk shows in Atlantic City, N.J., discussing the benefits of the lower cost of government. He can be visited at
http://conservative-politics-infofind.com.
Featured by Resources For Attorneys, a
Legal and
Lifestyle directory for attorneys, lawyers and the general internet public.