Thursday, June 20, 2013

What Happened to the Party of JFK?

When President John F. Kennedy challenged Americans to “Ask not what your country can do for you; ask what you can do for your country,” it was call to take responsibility for ourselves and help our neighbors; it wasn’t an exhortation to pay more taxes to Washington DC. Kennedy CUT tax rates across the board, and promoted the cuts as energetically as Ronald Reagan would 20 years later, as the best way to increase the prosperity of the nation and the receipts to the treasury. History proved Kennedy right; the decade of the 1960’s was an era of robust economic growth in spite of an expensive and unpopular war (Vietnam) and the ambitious manned Apollo mission to the moon.
JFK is one of the great idols of liberals, but his actual fiscal policies are completely alien to the Democratic party of today, which has lurched toward hard-left socialism. Obama, Reid, Pelosi and their fellow travelers seem hell-bent to raise practically every existing tax as high as they can get away with and then pile new ones like the VAT on top. Nothing should move that they don’t command and control.
What are the results so far? Prolonged stagnation, unemployment sustained at record levels; the Great Recession.
This is America? Time to ask ourselves what we can do to take it back.

JFK State of the Union Address January 14 1963:
America has enjoyed 22 months of uninterrupted economic recovery. But recovery is not enough. If we are to prevail in the long run, we must expand the long-run strength of our economy. We must move along the path to a higher rate of growth and full employment.
For this would mean tens of billions of dollars more each year in production, profits, wages, and public revenues. It would mean an end to the persistent slack which has kept our unemployment at or above 5 percent for 61 out of the past 62 months--and an end to the growing pressures for such restrictive measures as the 35-hour week, which alone could increase hourly labor costs by as much as 14 percent, start a new wage-price spiral of inflation, and undercut our efforts to compete with other nations.
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--to those in Government, business, and labor who are responsible for our economy's success--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. It discourages extra effort and risk. It distorts the use of resources. It invites recurrent recessions, depresses our Federal revenues, and causes chronic budget deficits.
Now, when the inflationary pressures of the war and the post-war years no longer threaten, and the dollar commands new respect-now, when no military crisis strains our resources--now is the time to act. We cannot afford to be timid or slow. For this is the most urgent task confronting the Congress in 1963.
In an early message, 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 percent, to a more sensible range of 14 to 65 percent, with a split in the present first bracket. Two and one-half billion dollars results from reducing corporate tax rates, from 52 percent--which gives the Government today a majority interest in profits-to the permanent pre-Korean level of 47 percent. 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.
To achieve this reduction within the limits of a manageable budgetary deficit, I urge: first, that these cuts be phased over 3 calendar years, beginning in 1963 with a cut of some $6 billion at annual rates; second, that these reductions be coupled with selected structural changes, beginning in 1964, which will broaden the tax base, end unfair or unnecessary preferences, remove or lighten certain hardships, and in the net offset some $3.5 billion of the revenue loss; and third, that budgetary receipts at the outset be increased by $1.5 billion a year, without any change in tax liabilities, by gradually shifting the tax payments of large corporations to a . more current time schedule. This combined program, by increasing the amount of our national income, will in time result in still higher Federal revenues. It is a fiscally responsible program--the surest and the soundest way of achieving in time a balanced budget in a balanced full employment economy.
This net reduction in tax liabilities of $10 billion will increase the purchasing power of American families and business enterprises in every tax bracket, with greatest increase going to our low-income consumers. It will, in addition, encourage the initiative and risk-taking on which our free system depends--induce more investment, production, and capacity use--help provide the 2 million new jobs we need every year--and reinforce the American principle of additional reward for additional effort.
I do not say that a measure for tax reduction and reform is the only way to achieve these goals.
--No doubt a massive increase in Federal spending could also create jobs and growth-but, in today's setting, private consumers, employers, and investors should be given a full opportunity first.
--No doubt a temporary tax cut could provide a spur to our economy--but a long run problem compels a long-run solution.
--No doubt a reduction in either individual or corporation taxes alone would be of great help--but corporations need customers and job seekers need jobs.
--No doubt tax reduction without reform would sound simpler and more attractive to many--but our growth is also hampered by a host of tax inequities and special preferences which have distorted the flow of investment.
--And, finally, there are no doubt some who would prefer to put off a tax cut in the hope that ultimately an end to the cold war would make possible an equivalent cut in expenditures-but that end is not in view and to wait for it would be costly and self-defeating.
In submitting a tax program which will, of course, temporarily increase the deficit but can ultimately end it--and in recognition of the need to control expenditures--I will shortly submit a fiscal 1964 administrative budget which, while allowing for needed rises in defense, space, and fixed interest charges, holds total expenditures for all other purposes below this year's level.
This requires the reduction or postponement of many desirable programs, the absorption of a large part of last year's Federal pay raise through personnel and other economies, the termination of certain installations and projects, and the substitution in several programs of private for public credit. But I am convinced that the enactment this year of tax reduction and tax reform overshadows all other domestic problems in this Congress. For we cannot for long lead the cause of peace and freedom, if we ever cease to set the pace here at home.