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John F. Kennedy on Tax Reform
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FactCheck: JFK lowered top income tax rate from 91% to 65%
Rush Limbaugh said on his radio show on Oct. 12: "JFK made the case for tax cuts as a means of growing the economy. JFK, a Democrat, is advocating tax cuts in the same sense that Arthur Laffer always has.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!
Source: OnTheIssues FactCheck on the Rush Limbaugh Show
, Dec 10, 2012
1962: Paradoxically raise revenues by cutting tax rates
President Ronald Reagan said, "The more government takes in taxes, the less incentive people have to work. If, on the other hand, you reduce tax rats and allow people to spend or save more of what they earn, they'll become more industrious; they'll have
more incentive to work hard, and money they earn will add fuel to the great economic machine that energizes our national progress. The result: more prosperity for all--and more revenue for government."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."
Source: Time to Get Tough, by Donald Trump, p. 51-52
, Dec 5, 2011
1961: We need tax cut to keep drive from running out of gas
His effort was not how to divide the economic pie but how to enlarge it for everyone. Helping business profits led to more jobs. Helping consumer income led to more sales. When presented, it was a tax reform and tax reduction bill. When it was finally
reported out [of the House], he had his major tax cut bill with a little tax reform. More reforms, he agreed, were overdue, but they could not even pass committee.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.
Source: "Kennedy" by Ted Sorensen, p. 433
, Jan 1, 1965
Lower top income tax rate from 91% to 65%
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%, with a split in the present first bracket. $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%.
This is in addition to the more than $2 billion cut in corporate tax liabilities resulting from last year's investment credit and depreciation reform.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).
Source: State of the Union speech
, Jan 14, 1963
Cut personal & corporate taxes to stimulate economy
This administration pledged itself last summer to an across-the-board, top-to-bottom cut in personal and corporate income taxes to be enacted and become effective in 1963. I am not talking about a quickie or a temporary tax cut which would be more
appropriate if a recession were imminent. Nor am I talking about giving the economy a mere shot in the arm to ease some temporary complaint. The federal government's most useful role is not to rush into a program of excessive increases in public
expenditures, but to expand the incentives and opportunities of private expenditures.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.
Source: Speech at the New York Economic Club, New York City
, Dec 14, 1962
Page last updated: Apr 28, 2013
