Tax Cuts Benefit America
Published : February 16, 2018
Around the time of The Beatles' tax protest song, the United States progressive-punitive tax scheme was at 70 percent on regular income, which was brought down by Democratic President Johnson in 1964 from the 91 percent rate of 1963. President John F. Kennedy initiated the tax reduction by the issue to the forefront during his 1963 State of the Union address.
In defense of the tax cut, just two months before he was assassinated, President Kennedy addressed the nation on the tax reduction bill, which would become the Revenue Act of 1964. Kennedy said in the radio and television address on Sept. 18, 1963:
"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."
This sentiment was expressed throughout Kennedy's short administration. On Dec. 14, 1962, Kennedy addressed the Economic Club of New York. "It is a paradoxical truth that tax rates are too high today and tax revenues are too low-and the soundest way to raise the revenues in the long run is to cut the rates now," he said.
Kennedy's ideas were not entirely his own. His ideas came from previous presidents, including Republican President Calvin Coolidge. In the 1920s, Coolidge and Secretary of Treasury Andrew Mellon realized that former President Woodrow Wilson, who created the federal income tax and progressive-punitive tax scheme of 1913, had created too high a tax level. At 77 percent rate by 1918, the economy suffered, which meant that businesses and hardworking American people felt the effects.
Mellon stated in his 1924 book, Taxation: The People's Business" that "The history of taxation shows that taxes which are inherently excessive are not paid. The high rates inevitably put pressure upon the taxpayer to withdraw his capital from productive business."
Like President Kennedy, President Ronald Reagan was a student and fan of Coolidge and Mellon. Reagan also understood the deleterious effect that too high a tax rate had on the American people. In 1981, Reagan signed into law, the Economic Recovery Tax Act (ERTA), which slashed the tax rate from 70 to 50 percent. In the Tax Reform Act of 1986 (TRA), this rate dropped to 28 percent. And while the liberal naysayers attacked Reagan's plans as being foolish trickle-down economics nonsense, Reagan's tax cuts proved to be resounding success, creating millions of jobs and property for millions of hardworking Americans.
Most recently, President Trump, a student of Coolidge, Kennedy and Reagan, signed a Kennedy-Reagan-style tax cut bill for the American people. Since the passage of the Tax Cuts and Jobs Act in December 2017, the American people have seen American businesses expand, productivity increase, salaries rise, unemployment decrease to record lows, and overseas capital return to America in the billions.
While this author is optimistic at Americans being able to keep, save, and invest more of their hard-earned income, there is equal concern that both Democrats and Republicans persist in spending too much of individuals' money, which is not the politicians to spend. This adds to the ever-growing debt currently at $20 trillion. If this Federal Deep State's spending continues at this rate, it could cripple the very next generation's ability to live a prosperous American life.
Elected to office should be public servants who understand Economics 101, recognize the destructive effect of federal government taxes that are too high, and desire to reduce the ridiculous spending by federal government gone wild. The more the federal government spends the less free the American people become.