John F. Kennedy on Tax Reform
Similarly, in 1963 radio and television address to the nation on his tax reduction bill, President Kennedy stated: "A tax cut means higher family income and higher business profits and a balanced federal budget. Every tax payer 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."
Rush referred to this 1962 speech by Pres. Kennedy, pledging "across-the-board, top-to-bottom cut in personal and corporate income taxes" for the purpose of stimulating the economy.
Rush seems to have a case. But in fact, the top marginal tax rate in 1962 was 91% and JFK proposed lowering the top rate to 65% (compared to a top rate of 37% today). Similarly, the corporate tax rate in 1962 was 52% and JFK proposed lowering it to 47% (compared to a corporate rate of 15% today).
In the context of the much higher rates in 1962, cutting tax rates meant something very different than today--Rush presumably knew that context, and hence was lying about JFK's proposal. No politician of any party today would even consider RAISING tax rates to the LOWER levels proposed by JFK in 1962!
But Reagan wasn't the only president who understood that lower taxes yield higher revenues by unleashing economic growth and job creation. To many Democrats' chagrin, Reagan was merely echoing the economic thoughts of President John F. Kennedy, who had already said, in 1962, "The paradoxical truth is that the tax rates are too high today and tax revenues are too low and the soundest way to raise revenues in the long run is to cut rates now."
The President went on television once again. He illustrated how the bill would reduce th taxes of a typical family, and how their tax savings would be used to create more jobs. Ten thousand new jobs had to be created every day; recessions have occurred on the average every 44 months since World War I. "We need a tax cut to keep this present drive from running out of gas." The speech was a success and so was the bill. The Kennedy tax bill, enacted with the help of his successor, and the unparalleled period of expansion stand as a monument to his economic wisdom and political tenacity.
OnTheIssues NOTE: The actual tax rates from the resulting US Revenue Act of 1964 were 70% top personal rate (compared to a 37% top rate in 2012) and 48% corporate tax rate (compared to a 15% corporate rate in 2012).
To achieve these greater gains, one step, above all, is essential-- the enactment this year of a substantial reduction and revision in Federal income taxes. For it is increasingly clear that our obsolete tax system exerts too heavy a drag on private purchasing power, profits, and employment. Designed to check inflation in earlier years, it now checks growth instead.
I shall propose a permanent reduction in tax rates which will lower liabilities by $13.5 billion. Of this, $11 billion results from reducing individual tax rates, which now range between 20% and 91%, to a more sensible range of 14% to 65%. $2.5 billion results from reducing corporate tax rates, from 52%--which gives the Government today a majority interest in profits-to the permanent pre-Korean level of 47%.
When consumers purchase more goods, plants use more of their capacity, men are hired instead of laid off, investment increases, and profits are high. Corporate tax rates must also be cut to increase incentives and the availability of investment capital. The government has already taken major steps this year to reduce business tax liability and to stimulate the modernization of our productive plant and equipment.
I am submitting for fiscal 1963 a balanced Federal Budget. This is a joint responsibility, requiring Congressional cooperation on three sources of income in particular:
|Other past presidents on Tax Reform:||John F. Kennedy on other issues:|
George W. Bush(R,2001-2009)
George Bush Sr.(R,1989-1993)
John F. Kennedy(D,1961-1963)
Harry S Truman(D,1945-1953)
Past Vice Presidents:
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