Editor’s Note: Stephen Moore is an economic adviser to FreedomWorks, a conservative advocacy group, and a CNN economic analyst. He was a senior economic adviser to the Trump campaign. The views expressed are his own.
How sad is it that the party that brought us John F. Kennedy’s tax cuts, economic growth and higher wages is now the party that puts redistribution ahead of prosperity.
Not a single House Democrat on November 16 or Senate Democrat on December 2 voted for their version of the Tax Cuts and Jobs Act. Not one.
Some argue that the Trump tax cut will increase the deficit, but they should listen to the wisdom of JFK in 1962, when he, too, was battling a large deficit. President Kennedy declared at the New York Economic Club that “it is a paradoxical truth that 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.”
JFK knew that America’s biggest problem was not the budget deficit but a growth deficit. And based on Donald Trump’s proposed tax cuts, he seems to share JFK’s wisdom.
Kennedy was, of course, proven exactly right. After the tax cuts were enacted after his death, America experienced one of the greatest periods of prosperity in our history.
Larry Kudlow’s 2016 book “JFK and The Reagan Revolution” documented the post-JFK tax cut growth spurt. “The tax payments by the wealthiest filers nearly doubled,” he wrote. “We had many quarters of 6% growth back then.”
That same effect was duplicated when Ronald Reagan chopped the top income tax rate from 70 to 28% and the corporate rate from 46 to 34%. The share of taxes paid by the richest 1% rose around 6% from 1980 to 1990. Total tax revenues surged from $517 billion in 1980 to just over $1 trillion by 1990.
Which brings us back to the 21st century “progressive” Democrats. In 1986, Reagan’s tax reform bill passed the US Senate – are you sitting down? – by a vote of 97-3. This included the votes of such prominent Democrats as Bill Bradley, Ted Kennedy, Howard Metzenbaum, and Sam Nunn.
In 1997, Bill Clinton – who admittedly raised taxes in 1993 – signed into law one of the biggest bipartisan tax cuts in history, including a slashing of the capital gains tax. Although some argue that Clinton’s tax cuts were not the cause of the economic prosperity that followed, I don’t think it was a mere coincidence that America experienced a growth and employment boom so great that the budget reached a surplus.
Yet some seem to disregard this history and claim that tax cuts don’t work. We also hear claims that Republicans are no longer the party of deficit reduction. Perhaps not. But the party has transformed itself into the party of growth. The Democrats are the new austerity party.
Democrats say they wish Trump had put forward a bipartisan tax plan, but what are the Democratic alternatives? Bernie Sanders’ proposal would raise the top tax rate to over 50%. Can anyone with a straight face argue that this would help the economy?
The Democratic party today has repudiated JFK economics. Donald Trump has picked up that mantle. Readers can go to the Committee to Unleash Prosperity website and watch a video of JFK’s wisdom on taxes.
As Kennedy said in his 1962 address on the state of the national economy, “Every dollar released from taxation that is spent or invested will help create a new job and a new salary.”
Question: does that sound like Nancy Pelosi and Charles Schumer, or Donald Trump?